1951-10-26

Mr. Speaker:: May I be permitted to present the second report of the committee which was appointed on October 9, 1951, to consider with Mr. Speaker the procedure of this house for the purpose of suggesting any changes that may be desirable to assure the more expeditious dispatch of public business.
Your committee, pursuant to clause 2 of its first report, concurred in on October 12, 1951, relating to the hours of the sitting of the house, held a further meeting on October 25, 1951, to consider the results of the two weeks' experiment, and recommends as follows:
That the following new hours of sitting be given a trial on an experimental basis during the next two weeks:
For the week commencing on October 28, Mr. Speaker take the chair at 2.30 o'clock, p.m., on each sitting day and adjourn the house at 11 o'clock, p.m., without question put, unless the closure rule (standing order 39) be then in operation; except on Monday, Wednesday and Friday when the hour of adjournment will be 6.30 o'clock, p.m.; with provision for intermission from 6.30 o'clock, p.m. to 8 o'clock, p.m. on Tuesday and Thursday; and, subject to any special orders, the hour set aside for private and public bills under standing order 15 remain the same on Tuesday and be from 5.30 o'clock, p.m. to 6.30 o'clock, p.m., on Friday.
For the week commencing on November 4, Mr. Speaker take the chair at 2.30 o'clock, p.m., on each sitting day and adjourn the house at 10.30 o'clock, p.m., without question put, unless the closure rule (standing order 39) be then in operation; except on Wednesday when the hour of adjournment will be 6 o'clock, p.m., and Friday when the hour of adjournment will be 7 o'clock, p.m.; with provision for the usual intermission from 6 o'clock, p.m., to 8 o'clock, p.m. on Monday, Tuesday and Thursday; and, subject to any special orders, the hour set aside for private and public bills under standing order 15 remain as at present on Tuesday and be from 6 o'clock, p.m. to 7 o'clock, p.m., on Friday.
That toward the end of the second week your committee consider the results of the four weeks' experiment and bring in recommendations based thereon with respect to the balance of the present session.


Mr. W. G. Weir (Portage-Neepawa):: Mr. Speaker, by leave of the house I beg to move, seconded by the hon. member for Grenville-Dundas (Mr. Casselman):
That the second report of the select committee appointed on October 9, 1951, to consider with Mr. Speaker the procedure of this house for the purpose of suggesting any changes that may be desirable to assure the more expeditious dispatch of public business and presented this day be now concurred in.


[Stage Direction]
Motion agreed to.


Mr. P. E. Wright (Melfort):: Before you
proceed, Mr. Speaker, I wish to ask leave, seconded by the hon. member for Cape Breton South (Mr. Gillis), to move the adjournment of the house under standing order 31, for the purpose of discussing a definite matter of urgent public importance, namely, the urgent need for consideration at this session of the plight of war veterans in receipt of war veterans allowances, with particular reference to the inadequacy of the amounts they are receiving in the light of today's cost of living. The urgency of this motion is based on the need of bringing to the attention of the government the necessity for action at this session.


Mr. Sinnotl:: A political dodge.


Percy Ellis Wright: Tell that to your war
veterans.


Mr. Speaker:: Standing order No. 31 says:
Leave to make a motion for the adjournment of the house (when made for the purpose of discussing a matter of urgent public importance) must be asked after the ordinary daily routine of business (standing order 15) has been concluded and before notices of motions or orders of the day are entered upon.
I might say that, unfortunately, I was under the misapprehension that only motions under routine proceedings could be made today and I informed another hon. member of this house that his motion should be made immediately before the orders of the day are called. Under those circumstances, although the rule states to the contrary that only one motion may be made at a sitting, I shall also-hear the other motion.
I must decide whether the motion of the1 hon. member for Melfort should be proceeded! with. Standing order 31 states in paragraph (3):
He-
430	HOUSE OF
War Veterans Allowances
That is, the mover of the motion.
-then hands a written statement of the matter proposed to be discussed to Mr. Speaker, who, if he thinks it in order, and of urgent public importance . . .
And so on. I must decide whether it is of urgent public importance. Under section 174, urgency is defined as follows:
"Urgency" within this rule does not apply to the matter itself, but it means "urgency of debate," when the ordinary opportunities provided by the rules of the house do not permit the subject to be brought on early enough and public interest demands that discussion take place immediately.
The subject matter of the motion was discussed in the house yesterday, and we are still debating the speech from the throne. Under the sessional order of this house, the speech from the throne must be taken up on Monday and Wednesday of next week. An opportunity will then be given to discuss the matter referred to in the motion that has been made. Although the matter is an extremely important one, in my opinion it is not one which comes within the rule of urgency as set out in standing order 31.


Mr. M. J. Coldwell (Roselown-Biggar):: Mr. Speaker, may I say a word before you make a ruling. I respectfully suggest to you that a number of the members of the house who are interested in this matter have already spoken on the address. This matter now arises because of the statement made by the Minister of Veterans Affairs (Mr. Lapointe) a day or *two ago to the effect that the question would not come before the house until next session.
As to the matter having been raised in the debate in connection with old age pensions, may I say it arose only incidentally, and I do not think that it was debated as it deserved to be debated, having regard to the urgency of this question at the present time. If we are to take the Minister of Veterans Affairs at his word, no opportunity for debate will be provided by the government until next session. Many hon. members of the house have already spoken on the address and are therefore debarred from speaking again on this matter. As to the debate on old age pensions, this matter could only be incidental to the discussion.


Mr. Speaker:: I recognize the point of what the hon. member for Rosetown-Biggar (Mr. Coldwell) has said with respect to those who have spoken on the motion for an address in reply to the speech from the throne. But I would point out that most of those who have spoken-in fact, this statement applies with few exceptions-have spoken on the amendment to the amendment. There will therefore be given to practically all the members of this


house an opportunity to speak on the main amendment and on the motion. I feel satisfied that there will be an early opportunity for hon. members to speak on this matter.
As I said, I informed another hon. member today that a motion under standing order 31 should be made immediately before orders of the day are called. Under the circumstances, and this is in no way to be taken as a precedent, I am going to allow the hon. member to make his motion.



AVAILABILITY OF FREIGHT CARS-MOTION FOR ADJOURNMENT UNDER STANDING ORDER 31

Mr. J. G. Diefenbaker (Lake Centre):: Mr. Speaker, as a preliminary to the motion, if I could have the indulgence of the house for a moment or two, I should like to point out the serious, almost tragic, situation in the western provinces in connection with the marketing of the wheat crop; and I do so in no partisan sense.


Some hon. Members:: Oh, oh.


John George Diefenbaker: Possibly my hon. friends think differently than I do, but I do it in no partisan sense. I do it for the purpose of bringing to -the attention of the house, and permitting debate on the subject, the need for something being done at once to meet a crisis that faces the western farmer in connection with the delivery and storage of his wheat.
Freight car supplies are far below what they should be.


Some hon. Members:: Order.


John George Diefenbaker: Many farmers have thousands of bushels of wheat which they are unable to market because of a serious discrimination that is taking place against certain districts and areas, although I do not say that it is intentional. Having said that, I ask leave, seconded by the hon. member for Souris (Mr. Ross), to move the adjournment of the house under standing order 31, to discuss the imperative need of immediate action to be taken by the government to alleviate the economic hardship being caused to many farmers in the prairie provinces and the calamitous losses in crop yield and grade that face them, unless effective action is taken by the federal authorities to meet this problem and to assure that many areas and districts in the prairie provinces that are being denied a just and fair share of the available freight cars and storage facilities shall be assured of an equitable allocation and distribution of such freight cars.


Mr. Speaker:: This motion is made under standing order 31, the terms of which are becoming quite familiar to hon. members of this house. As hon. members know, the member making the motion hands a written statement to Mr. Speaker, who must decide two things. He must decide whether it is in order and whether it is of urgent public importance. The urgency referred to is the urgency of debate; it is not the importance of the matter itself that is to be decided, but whether debate should take place now rather than at some later time; whether it is so important that the debate should take place now, and that an early opportunity will not be given under the ordinary rules of the house to debate this motion.
May I refer hon. members again to paragraph 174 of Beauchesne's third edition which reads as follows:
"Urgency" within this rule does not apply to the matter itself, but it means "urgency of debate," when the ordinary opportunities provided by the rules of the house do not permit the subject to be brought on early enough and public interest demands that discussion take place immediately.
As hon. members are aware, under a sessional order of this house the speech from the throne will be considered on both Monday and Wednesday of next week. At that time a discussion of this matter would be in order. Although it is an extremely important matter, in my opinion it is not one of urgency within the rules of the house, in view of the fact that an early opportunity will be given to hon. members to discuss the question raised. Under the circumstances, I cannot allow the motion to stand at this time.



RAILWAY LEGISLATION


Hon. Lionel Chevrier (Minister of Transport) moved:: That a special committee on railway legislation, consisting of 31 members, to be named at a later date, be appointed to consider Bill No. 12, an act to amend the Railway Act, Bill No. 6, an act to amend the Canadian National-Canadian Pacific Act, 1933, Bill No. 7, an act to amend the Maritime Freight Rates Act, and such other railway legislation as may be placed before it; and that the committee be empowered to send for persons, papers and records, to sit while the house is sitting, report from time to time and to print such papers and evidence from day to day as may be ordered by the committee; and that paragraph (1) of standing order 65 be suspended in relation thereto.


Mr. Howard C. Green (Vancouver-Quadra):: Mr. Speaker, the official opposition have no objection to the problem which is dealt with by these bills being referred to a committee of the house for study, but I have two suggestions which I should like to place before the minister today with regard to the procedure to be followed.
Special Committee on Railway Legislation
In the first place, I suggest that, instead of setting up a special committee to consider these bills, the reference should be to the standing committee of the house on railways, canals and telegraph lines. That was the practice followed by the government in 1929 when there were important amendments to the Railway Act. I believe that at that time the study was made by the standing committee, not by a special committee.
The standing committee has had considerable experience with problems of this type. In 1950 it dealt with amendments to the Canada Shipping Act, which were extensive and complicated, perhaps just as much so as the amendments to the Railway Act which are contained in Bill No. 12. Furthermore, the standing committee has dealt with' different bills authorizing the construction of railways and I submit is in a position to deal efficiently with the problem now before the house.
Canada is in the process of working out a new national transportation policy. The bills presented now are only one part of that policy. Perhaps the other parts, which will follow at later sessions, will also have to be considered by a committee, and it would be unwise, in our opinion, to set up a special committee in each case. Why not let the standing committee do its job? We have quite a few standing committees of the house. Several of them never meet at all except to choose chairmen, which I think is unfortunate. In the standing committee on railways, canals and telegraph lines we have a committee which has actually been working each session and doing good work. I do hope that the minister will agree to have this question referred to that committee. At this fall session there will be only two or three committees sitting. It is not as though there would be many committees taking up the attention of a large number of members, who in some cases have been sitting on two or more committees. This fall we are going to have in all only two or three committees. There is no reason why this standing committee on railways, canals and telegraph lines could not do a first-class job on this particular question.
This point was raised with the minister on April 5 of this year, when we had a discussion on the report of the Turgeon commission on transportation. The discussion will be found at page 1657 of Hansard. I asked the minister this question:
The minister means that any legislation brought in will be referred to the committee on railways, canals and telegraph lines.
His answer was as follows:


Lionel Chevrier: What I mean is that legislation
having to do with equalization, if it is approved

Special Committee on Railway Legislation of by the government, could, I think, be referred to the committee on railways, canals and telegraph lines, if it was the wish of the house.
Then on June 14 of this year the minister introduced Bill No. 377, which was a bill to amend the Railway Act in much the same terms as Bill No. 12, which is to be considered this afternoon. His explanation will be found at page 4065 of Hansard. Asked to explain the bill on first reading, he said:
This bill, which is to amend the Railway Act, together with the other two which follow, an act to amend the Canadian National-Canadian Pacific Act, 1933, and an act to amend the Maritime Freight Rates Act, are bills which have been drafted to meet the recommendations of the royal commission on transportation so far as the equalization of freight rates is concerned.
When we reach the second reading stage of these bills I propose to ask my colleague, the Minister of Public Works, to move that the bills be not now read a second time but that the subject matter thereof be referred to the standing committee on railways, canals and telegraph lines, with instructions that the committee shall consider the same and report thereon from time to time to the house.


Howard Charles Green: Mr. Speaker, is it the intention that
the standing committee should consider the subject matter of these bills during the present session, or at the fall session?


Lionel Chevrier: The committee on railways, canals and telegraph lines is the master of its own procedure, and will decide what action it will take in connection with the bills.
All I am suggesting today is that the minister's own promise, as made on June 14 of this year, should be fulfilled, namely that instead of referring the bills to a committee, he should refer the subject matter of the bills for study before second reading, anid that the reference be to the standing committee on railways, canals and telegraph lines, rather than to a select committee which of course will be an entirely new committee.


Major James William Coldwell: Mr. Speaker, we learned of the intention of the government, and therefore had an opportunity of considering the matter, and we are of the same opinion as that expressed by the hon. member for Vancouver-Quadra (Mr. Green). We think that we have an experienced committee which has been dealing with railways, canals and telegraph lines for a number of years. Some members of the committee have had experience on that committee for a number of years, and we are of the opinion that much more could be done by an experienced committee than one which is set up anew to deal with this problem. I suggest to the minister that it would be in the best interests of the house and of those who will appear before that committee, and the officials who will be there to advise hon. members, that the experience of this committee should be utilized in discussing this problem, which is of very great importance not only to the government but to the country

and to every member of the House of Commons as well as indeed to the railways. And therefore I would support-I may say that I do so at the request of my colleagues, and I am in agreement with it of course-the suggestion that the procedure outlined by the hon. member for Vancouver-Quadra be followed.
Hon Lionel Chevrier (Minister of Transport): Mr. Speaker-


Mr. Speaker:: Order. If the Minister of Transport speaks now he will close the debate.


Mr. Knowles:: Is this a substantive motion?


Lionel Chevrier: I am glad to see that both the spokesman for the official opposition and the C.C.F. party agree that the legislation should be referred to a committee for study. There is, however, some disagreement as to which committee it should be referred to. While it is true, as stated by the hon. member for Vancouver-Quadra, that on one occasion, if not on more than one, I indicated to the house, first that the subject matter of this legislation should be referred, or might well be referred, to the committee on railways, canals and telegraph lines, still, after giving it further consideration, I came to the conclusion, with which my colleagues agree, that it would be a better and a more efficient procedure to send it to a special committee. I want briefly to speak about the two points raised by the hon. members. First, I would deal with the one having to do with the subject matter. The moment the subject matter was referred to the committee, and the bills were reported upon, then it meant that entirely new bills would have to be introduced in this house. That action would have been required, because it had not been decided what form the $7 million subsidy should take. In other words, it had not been determined at the last session of parliament whether we would cover it by a section in the bill or place an item in the estimates.
Having decided to do it by way of a section in the bill, it was necessary to introduce a resolution. So that it was therefore no longer possible to refer the subject matter of the Railway Act amendment, if not the whole legislation, direct to the committee. It was necessary on that account to refer the actual bills; and that is the procedure which, so far, the government has followed-by placing the bills on the order paper, and considering today the second reading thereof.
Now, with respect to the other point, it is true that the committee on railways, canals and telegraph lines has done an excellent job on railway legislation, both public and private

bills dealing with matters concerning railways generally. But I should like to submit to the house that it is a fairly large committee, so far as numbers are concerned, and it was felt by the government that a smaller committee composed of some thirty-one members which could be representative- and which I am sure will be representative of all parts of Canada, because I have seen the list prepared by those responsible from this side of the house and I know it gives representation to every area in Canada- would be more satisfactory.
Because of that, the government was of the opinion that this committee might be in as good, if not-and I say this with all respect- a better position to give its full time to this legislation. Because if, perchance, it were not possible to deal with the bills during this session, and we had to go over to the next session-which I hope will not be so-then the committee on railways, canals and telegraph lines would perhaps be extremely busy dealing with other bills of a public and private nature.
For that reason we hope this procedure will commend itself to the best judgment of the house, and I trust the suggestion will be adopted.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. John Decore (Vegreville):: Mr. Speaker, I should like to ask a question of the Secretary of State for External Affairs. Is the minister prepared to make a statement as to whether there has been any decision to inaugurate shortwave broadcasts to Europe over the Canadian Broadcasting Corporation international service by the addition or inclusion of other languages in addition to those now used, for the purpose of informing as many people as possible under Soviet domination about our Canadian way of life?


Hon. L. B. Pearson (Secretary of Slate for External Affairs):: Mr. Speaker, I understand a decision has been taken that the C.B.C. international service shall make shortwave broadcasts in the Ukrainian language. The C.B.C. is now making the necessary preliminary arrangements for the inauguration of these broadcasts.



RAILWAY ACT


Lionel Chevrier: the second reading of Bill No. 12, to amend the Railway Act.
Railway Act
He said: Mr. Speaker, this bill is based upon the recommendations of the royal commission on transportation and seeks to put them into effect, particularly those dealing with equalization. I should like to make some remarks of a general nature on the amendments therein proposed.
The sections of the present Railway Act dealing with tariffs and tolls, which are the principal subjects of the proposed amendments, have been changed little if at all since 1903. In passing the early railway legislation, parliament's concern with rate regulation was a relatively limited one, namely, the prevention of unjust discrimination. Nevertheless it promised a solution to the discontent and dissatisfaction which had been developing for over half a century, and probably few pieces of legislation won greater or more widespread approval.
In a small and compact economy the "unjust discrimination" concept of public control might well have maintained itself to the general satisfaction of all parties. Similarity of conditions, including those of competition, would have required only a minimum of intervention by the regulatory board.
However ideal such a state of affairs may appear, one would be less than realistic to overlook the fact that we are far from having the ideal conditions for it. Instead of being small, compact and homogeneous, our country is large, sprawling and varied. Densities of population, producing and consuming areas, types of traffic, and lengths of haul, to mention but a few factors, all show the widest variation. And in addition thereto, the last quarter century, in particular the last decade, has been a period of tremendous economic change with important consequences to transportation. The royal commission assessed these and other factors in considerable detail; and, in concluding that the present Railway Act was deficient in certain respects, stated:
It appears that Canada has reached a stage in its development when former methods of making regional rates must give way to a uniform rate structure that, as far as may be possible, will treat all citizens, localities, districts and regions alike.
The board of transport commissioners is a statutory tribunal and as such must rely for its authority upon the Railway Act. A warrant must be found in the act for its orders or they are null and void. Its decisions are remedial and corrective in intent, endeavouring to remedy a situation rather than punish a dereliction. The board's responsibility is to see that all parties receive fair treatment. It is legislation based on this premise of fair treatment which confers wide general powers on the regulatory board but is sparing in specific directives. The board is

i ji!
Railway Act given wide powers of initiative to meet particular situations, but is not encouraged to expand its regulations as an end in itself. There seems no doubt but that such general policy will continue to meet the approval of the Canadian people. On this point the royal commission found almost unanimous agreement among all who appeared before it. No one asked that the board of transport commissioners be made an economic planning board, nor for that matter did anyone seek to have the board "manage" the railways. I do not believe that this point can be over-emphasized, for failure clearly to define the purpose and extent of regulation has provoked regrettable dispute between parties who actually have been very close to agreement on this essential point all the time.
The findings of the royal commission indicate that rate regulation would be more compatible with the public interest and would more effectively meet our national needs if parliament were to determine a national freight rates policy. In accordance with the commission's recommendations section 332A of the present bill provides an over-all directive respecting freight rates and authority for the board to carry out parliament's intent. If it is the desire of the Canadian people that such basic conditions should govern the freight rate structure-and the royal commission was of this opinion-then the board should be so instructed by the inclusion of those conditions in the Railway Act.
The attainment of basic uniformity in the freight rate structure is to be sought by modification, not repudiation, of the general principles on which existing tariff and toll legislation has been based. Both the board and the railways would retain their respective fields of initiative in rate matters. The rates which by this legislation would be subject to equalization are almost entirely those which might be termed the "permanent" or basic rates in the rate structure. These rates are not subject to the same frequent changes as are those which in the course of the railways' day to day business are constantly being issued, revised or cancelled.
The only changes to which the permanent or basic rates have been subject have been the general percentage increases or decreases and such adjustments resulting from the board's numerous decisions bringing them closer to equality or removing unjust discrimination. With substantial equalization accomplished, the motive for many such adjustments would disappear. The general position would then be a relatively constant body of equalized class and commodity rates applicable throughout the country, and beneath which the lower specific commodity

and competitive rates will appear, change or disappear as particular circumstances and conditions require.
It need not be anticipated that the proposed amendments will result in a body of freight rates which will disrupt established industry and trade patterns. The differences to be equalized are not that extensive. The legislation offers a means whereby general agreement will be obtainable on the basic elements of the rate structure-class rates and commodity mileage rates-and relief to the board from those regional controversies from which it has never been free in all the 48 years of its existence.
In my opinion the great advantage to be derived from this legislation lies in the removal of a persistent source of regional grievance. In this country, made up as it is of widely differing regions, no state of affairs within the power and responsibility of parliament, and which is a source of friction and grievance between regions, should be permitted to continue. So long as regional grievances remain unsolved they encourage thinking _ exclusively in terms of regional interests rather than in terms of national interest.
Clauses 1, 2 and 3 of the bill relate to the appointment, term of office and salary of the chief commissioner. As the Railway Act now stands, the office of chief commissioner is filled by a judge of the exchequer court. It has been considered advisable to change these requirements and the bill now provides that any person may be appointed chief commissioner who is or has been a judge of the superior court of Canada or of any province of Canada, or who is a barrister or advocate of at least ten years' standing at the bar of any such province. The bill also provides that the chief commissioner shall have a position and pension rights similar to those of a judge of the exchequer court and an annual salary equal to the salary of the president of the exchequer court. If the term of office of the chief commissioner expires before he reaches seventy-five years of age and he is not reappointed, he becomes a supernumerary judge of the exchequer court with the same rights and privileges as a puisne judge.
Clause 4 of the bill provides for an appeal from a decision of the board to the Supreme Court of Canada on a question of law upon leave being obtained from a judge of the supreme court. Parties to a proceeding before the board now have the right to apply to a judge of the supreme court for leave to appeal to that court on a question of jurisdiction. It is proposed to give the parties the right to apply to a judge of the supreme court

for leave to appeal on either a question of law or a question of jurisdiction. This amendment would make an application to the board for leave to appeal unnecessary and it is proposed to repeal subsection 3 of section 52. The commission did not recommend any change in subsection 1 of section 52 which provides for appeals to the governor in council, and no amendment is proposed in this respect.
The next amendment of importance provides for a new division of freight tariffs. In order to implement the recommendation of the royal commission and to bring the provisions of the act relating to freight tariffs more in line with modern railway practice, sections 328 to 332 inclusive are repealed and new provisions substituted therefor. At present, section 328 of the Railway Act provides for three classes of freight tariffs, namely, the standard freight tariff, special freight tariffs and competitive tariffs. The bill provides for a new division of tariffs into four classes, namely, class rate tariffs, commodity rate tariffs, competitive rate tariffs and special arrangements tariffs. This new division of freight tariffs is well understood by railway and shipping interests and will be helpful in working out the application of the equalization sections of the bill.
New section 331 of the bill provides that the board may require a company issuing a competitive rate tariff to furnish information to establish that the competition actually exists; that the rates are compensatory; and that the rates are not lower than necessary to meet competition. The section provides that the board may require other information to be filed regarding competitive rates.
The part of the bill that empowers the board to effect and maintain the uniformity in freight rates throughout Canada recommended by the royal commission is found in new section 332A. Subsection 1 of this section declares the national freight rates policy and says that every railway company shall, so far as is reasonably possible, in respect of all freight traffic of the same description, and carried on the same kind of cars, passing over all lines or routes of the company in Canada, charge the same rates to all persons. Subsection 2 provides for a uniform scale of mileage class rates and a uniform scale of mileage commodity rates and for revision of any other rates with a view to implementing the national freight rates policy. Subsection 3 gives the board power of disallowance of any tariff considered to be contrary to the national freight rates policy, and subsection 4 contains the exceptions to equalization.
Hon. members will note that the provision for an equalized freight rates structure is
Railway Act
made subject to the proviso to subsection 5 of section 325 of the Railway Act which establishes the Crowsnest pass rates, and is also made subject to the Maritime Freight Rates Act. Neither of these special statutory provisions will be affected by the new equalization section of the bill. The other exceptions are joint international rates, rates on export and import tariffs, competitive rates, agreed charges, rates on the White pass and Yukon route, and any other case where the board considers an exception should be made from the operation of this section.
Provision is made in new section 332B to implement the recommendation of the royal commission that the benefit of any transcontinental rate from the east to the British Columbia coast or from the Pacific coast to eastern Canada should be carried back in the rate to intermediate territory on a basis not more than one-third greater than the transcontinental rate. In other words, when competitive transcontinental tariffs are published by the railways, such tariffs shall provide that the rates to or from intermediate territory shall not exceed the transcontinental rates by more than one-third.
Another amendment contained in clause 10 of the bill carries out the recommendation of the commission on interline rates. An interline rate is one which applies between stations on the lines of two or more different railway companies. As a rule these rates are lower than the sum of the local rates but more than the rate for the same distance over the line of one company. The amendment dealing with this problem provides that in any case where it is shown that joint interline rates exceed the rates in a single line tariff for the same or similar distances in the same locality, the burden of proof shall be placed on the companies to show to the satisfaction of the board that there are greater costs involved in the joint movement, and only in such case are the companies permitted to charge joint rates higher than on the single line basis.
The royal commission recommended that the Railway Act be amended so that the board should be empowered and directed to prescribe, as soon as practicable, a uniform classification and system of accounts and reports for rail items for the Canadian National and Canadian Pacific railways. The commission also recommended that the board be empowered and directed to maintain a revised statistical procedure so designed as to provide the requisite data necessary for the performance of its duties. Effect is given in clause 15 of the bill to these recommendations.

Railway Act
Clause 18 of the bill covers the payment to the Canadian National and Canadian Pacific railways of the cost of maintaining corresponding amounts of trackage on that part of the two transcontinental railway systems which serves as a link or bridge between the east and west, that is, between Sudbury and Fort William on the Canadian Pacific and between Capreol and Fort William and between Cochrane and Armstrong on the Canadian National. The payments to the railway companies are limited to $7 million in the aggregate and are to be paid out of the consolidated revenue fund. This part of the bill was outlined when the resolution was considered in this house on October 23.
In view of the complicated and difficult nature of the provisions of the bill to amend the Railway Act, and the importance to the welfare of all citizens in all parts of Canada of the changes recommended by the commission, I consider that this bill should be referred to the special committee on railway legislation for further examination and study. The bills to amend the Maritime Freight Rates Act and the Canadian National-Canadian Pacific Act deal only with minor amendments and should go to the committee together with the bill to amend the Railway Act.
I have already indicated on several occasions that in our minds these bills are the implementation of the recommendations of the royal commission in so far as equalization is concerned. In other words, these bills not only lay down the principles recommended by the commission but also give effect to a number of recommendations on equalization in the report. I do not think it desirable that the government should be committed to all the details of the legislation prior to its being referred to the committee for consideration and report. It was our feeling all along that these bills should be referred to a committee. First of all I thought that the standing committee on railways, canals and telegraph lines might be the appropriate committee. Later, after giving it further thought and because of the reasons mentioned earlier this day and also because of the fact that this would be a committee to study principles, it was felt that it should be a special committee.
I hope that the committee which will hear these representations will not be put in the position of having to rehear all of the briefs, recommendations and statements that were made before the royal commission on transportation. I think it will be for the committee, in consultation with subcommittees if it is decided to establish them and in consultation with the chairman, to determine what the procedure should be. But if this

committee receives all these representations again it will bog down and the house will not be in a position to deal with this legislation at the present session. It seems to me -and I give this as my own opinion, not as any direction but for what it is worth-that those who will appear to make representations before the committee, individual witnesses, groups, associations and the like, should indicate whether or not this legislation has a detrimental or favourable effect upon their respective regions. Otherwise the committee will be listening to a repetition of arguments and representations already made. I am sure the house will wish those appearing before the committee to follow that course. Again I repeat that I give no direction. The committee is master of its own destiny, and I am sure that its members will deal with this legislation as it should be dealt with. At the conclusion of this debate I intend to move, as I have already indicated, that this particular bill, together with the other two which will follow, be referred to the special committee on railway legislation.


Howard Charles Green: Mr. Speaker, the Minister of Transport (Mr. Chevrier) has reviewed the terms of this particular bill, and I do not think there is any need for me to go over the same ground. The members of the official opposition are glad to facilitate the placing of this bill, and the two other measures known as an act to amend the Canadian National-Canadian Pacific Act, 1933, and an act to amend the Maritime Freight Rates Act, before the special committee on railway legislation. Mind you, we would have preferred to have them go before the standing committee on railways, canals and telegraph lines, but we cannot always have our way on these things, and now we shall facilitate getting the bills before the special committee.
We recognize very clearly the importance of the Turgeon report on transportation in Canada. It must be obvious to every member of the house who has given the matter any thought that the transportation question is extremely complicated and requires the most careful study. I find myself in sympathy with the remarks of the minister about the way in which the special committee should carry on. I agree that if we hear any large number of briefs similar to those which were placed before the royal commission it will be impossible for the committee to do a job at the present session.
However, I hope that representations will be made by the railways, the provinces and any organizations that are interested. The history of proceedings during the last few years is that only seven of the provinces

have shown an interest in the question of freight rates. Thus far Ontario and Quebec have shown very little interest. Of course there is a reason for that attitude in that in Ontario and Quebec the railways face extensive competition from trucks and water transportation on the canals and the great lakes with the result that freight rates have been kept lower than in other parts of the country. The seven outlying provinces have been the ones which have had to keep on complaining. I understand that the new province of Newfoundland is in the same position. It has been compelled to join in the chorus of protests from the other seven provinces. Therefore I hope that an opportunity will be given for the provinces to make their representations before the committee. The men representing them have acquired a very thorough knowledge of the whole freight rate question, and I am sure they could help us a great deal in our deliberations.
While we are anxious to facilitate getting these bills before the committee, there will be speeches made by members of the official opposition in which they will try to place before the house and the country some suggestions and complaints about the proposals. Perhaps it would be better for me to use the word "doubts". They have some doubts as to just how the plan is going to work out. I believe that is particularly true of members from the maritime provinces. There seems to be a great uneasiness there about how this so-called equalization is going to affect them.
As I see it, the main principle of the bill is contained in the new section 332A which sets out a national freight rates policy for Canada in these words:
It is hereby declared to be the national freight rates policy that, subject to the exceptions specified in subsection 4-
In this policy, of course, the exceptions are very important.
-every railway company shall, so far as is reasonably possible, in respect of all freight traffic of the same description, and carried on or upon the like kind of cars or conveyances passing over all lines or routes of the company in Canada, charge tolls to all persons at the same rate, whether by weight, mileage or otherwise.
That policy may be described as an equalization policy, although I think it is hardly that because there are so many exceptions. Some have described it as a policy of uniform rate structures. The implementation of the policy is left to the board of transport commissioners. This bill merely lays down the broad approach for the board, and results, of course, will only follow depending upon the manner in which the board carries out that policy.
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There are other important matters contained in the bill, but today I intend to refer only to one and that is the provision for the payment of a subsidy of $7 million for the maintenance of the transcontinental trackage through the wild country of northern Ontario. I do not know how long we shall be able to describe that country as wild. Every time I go through it there are new towns, and one of these days it may be an important producing part of the country. However, there will always be great expense in maintaining the tracks through that particular area, and I believe the minister will find general agreement with the proposal that there should be a subsidy paid for the maintenance of those tracks. The amount of $7 million was the amount recommended by the Turgeon commission. I do not know whether it will pay the whole cost of maintaining the tracks, but in any event it is a move in the right direction.
As I have said the implementation of the main national transportation policy is left to the board of transport commissioners. From what the minister has said in the different debates on this subject, I judge that the board will take a considerable time to implement this policy. The commissioners must first complete the general freight rate investigation. It is now over three years since they were instructed to undertake that investigation, and instructed in much the same terms as this national policy is outlined in the bill. Three years ago we were promised that action would be taken along that line right away but as yet there are very few results to be seen. If there is to be any long delay, I hope that there will be no more horizontal increases in freight rates in the meantime. Every time there is a horizontal increase it makes the discrimination across the country worse. Surely, a stop should be put to horizontal increases until the board has taken steps to implement the policy laid down in this bill.
I am afraid that the minister will have to do something about strengthening the board of transport commissioners. He has not made any reference to a step of that kind, but I believe that some of the trouble has been that the board is not sufficiently strong to handle the job.


Major James William Coldwell: Inadequate staff.


Howard Charles Green: Yes, and it probably has not an adequate staff. We find a reference to the board at page 273 of the Turgeon commission report. It says:
In dealing with the subject of the board, the importance of its functions and the high standard which should be maintained in the selection of its members cannot be stressed too strongly. Since its inception, the board's responsibilities have in many respects increased, and its jurisdiction has been

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extended. It is now called upon to regulate some of the most important public utilities in the country and its decisions are of vital importance to, and have far-reaching effects upon, almost every person in Canada.
There you have a very clear finding that the board of transport commissioners must be an exceptionally strong board. With all respect, I submit that the board could be improved, and I hope that the government will take steps to see that this board is set up in such a way that it can handle the problems which are now being placed before it.
It is unfortunate that the government has given no indication whatever of its policy with regard to the other recommendations made by the Turgeon commission. This legislation only deals with the first part of the commission's report. There is no indication of what the policy is to be regarding the change in capitalization of the Canadian National Railways. There is no indication either of the policy on broad questions such as whether this board of transport commissioners is to have jurisdiction over not only the railways but also shipping and aviation in Canada. Mind you, I do not want to be taken as arguing in favor of giving the commissioners authority over shipping, although I am not in a position to speak for the party in that regard. I think it is unfortunate that the government has not given the house and the country a clearer indication of the whole transportation policy, instead of giving us one part of such a policy. It is not possible for any committee or for the house to work out a proper policy to meet part of the situation when they have no indication whatever from the government as to what is to be proposed on these other matters.
Probably there is no domestic problem which is of greater importance to the Canadian people than that of transportation. Those of us who come from the more remote portions of the nation are always greatly concerned over this question. Transportation has been the means of building the nation, and it is still the main means of holding the nation together. In Canada transportation will always be of the utmost importance. The commission summed that up very neatly in the chapter on national transportation policy at page 275 of the report. It reads:
It has always been recognized that railways are of primary Importance to Canada and its people. Ours is a country great in size and small in population, yet today we rank third in the whole world in the export of goods. This by the very nature of things requires a long haul of primary commodities which to a great extent must be transported by rail.
We of the official opposition are very much concerned about Canada's transportation policy.

I can assure the minister that those members of this party who go into the special committee on railway legislation will do their best to see that thorough consideration is given to the questions under review, and that such consideration is given in a non-partisan way.


Major James William Coldwell: Mr. Speaker, this is an extremely important bill. It marks another step forward in the development of our entire transportation system.
I agree with the hon. member for Vancou-ver-Quadra (Mr. Green) in most of what he has said this afternoon, and particularly with regard to the necessity of considering the whole problem of transportation in all its phases in Canada. As I read the report, the royal commission on transportation emphasized four main problems. They suggested a plan for what they termed the limited equalization of freight rates as between the various regions of Canada and a recapitalization scheme for the government-owned Canadian National Railways, to reduce its fixed charges and to put it on a paying basis. I think that the house will have to go into the matter thoroughly when we have the opportunity to do so because, personally, I do not think the commission's proposals are sufficiently comprehensive to deal with the problem of the overcapitalization of the Canadian National Railways. I think, however, that it forms the basis for useful discussion and consideration.
The royal commission also suggested the co-ordinating of all forms of federally-controlled transport through a single regulatory board replacing the boards we now have, and I believe there are three of them. When the time comes I think perhaps we shall have to go beyond that point and consider whether or not it is in the interests of Canada as a whole and of the various forms of transportation as a whole to consider the regulation of the various forms of transportation under a single regulatory board with fairly wide powers, of course under the authority of this parliament.
Then the fourth recommendation which I think is important is the subsidy of some $7 million to help finance the unprofitable northern Ontario railroad stretch linking the east and the west; that is, on the C.P.R., the 550 miles-is it?


Lionel Chevrier: Five hundred and fifty-two miles.


Major James William Coldwell: Yes, the 552 miles between Sudbury and Fort William and a like distance on the Canadian National Railways. This particular bill deals with some other matters

such as the right to appeal to the courts, but in the main it deals with two of these problems, namely, the problem of equalization of freight rates and the problem of relieving the railways of the expense of maintaining the lines across that part of Ontario which in the past at least has been unproductive, although along the C.P.R. line today, I am glad to say, are some quite large and important industries that have been established, and towns like Marathon and Terrace Bay have sprung up in the past six or seven years-certainly within the last ten years- with not inconsiderable populations. I shall have something to say about this proposal in a moment or two. But, Mr. Speaker, it seems to me that it is indeed difficult to think of the commission's recommendations embodied in this bill as a plan for equalization; because there is not a single member in the house who would permit what we term complete equalization; that is to say, the west must maintain the statutory advantages of the Crowsnest pass agreement; the maritime provinces must maintain the benefit of the maritime freight rates; and so on. But in some other respects we can remove discrimination and we can more or less equalize the burden, although the difficulties are to an extent created, of course, by the developments that have occurred in recent years in other forms of transportation.
Apart from these exceptions I have no doubt that hon. members from the central provinces of Canada too will continue to demand an opportunity for competitive rates as long as we have the present transportation system as we have it today in Canada or as it will still be under the provisions of the bill. The competitive transportation system in the central provinces is, of course, the reason why the two provinces of Quebec and Ontario did not join with the seven other provinces of Canada in making representations before the royal commission, and will probably not be particularly interested in the work of this committee. From the point of view of the seven provinces which have co-operated, and which may indeed co-operate before this committee the problem is most important. Indeed, if they wish to co-operate in making representations before this committee, they should have every opportunity to present their case to it, because, after all, they are governments speaking for the peoples of their particular provinces.
There must then remain exceptions to the equalization plan; and I think that fact is recognized in the bill itself; that is, exceptions to the general plan of what the commissioners
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and we term "equalization", although, as I say, it is equalization to a limited extent.
The railways require and must have a certain level of revenue. I think we all agree with that statement. There is one thing that I think we must never forget. Canada could not be Canada, or this country could not exist, without those bands of steel, as I have sometimes called them, that bind it together from the Atlantic to the Pacific. Indeed, it was on the fundamental consideration of the building of the first transcontinental railway between what we today call central Canada and Vancouver that the province of British Columbia agreed to come into confederation over eighty years ago. The railways therefore must have revenue; and if they cannot get it in one place, they of course look for it in another. Because of the competition in central Canada there is no doubt whatsoever that, when you examine the profit and loss sheets, particularly those of the Canadian Pacific Railway, you find that the major portion of the profits of that great transcontinental railway-and may I say that like the Canadian National it is an extremely efficiently-run organization-is derived largely from western Canada and quite largely indeed from the three prairie provinces. We find that they exploit what we might call the non-competitive areas in order to make up their returns so as to dodge deficits and indeed to build up their profits. Therefore no scheme of equalization can of itself alter the necessity for the railways doing this kind of thing. But at the same time, increas.ed costs of railway operations, increased competition from trucks for the most profitable traffic, and from busses carrying express, carrying profitable freight and carrying passengers shorter distances and therefore not having to provide facilities like roadbeds, diners, sleepers and so on, exert a serious pressure upon our railway systems. That is why I said at the outset of my remarks that sooner or later this house will have to tackle this problem not as a single railway problem but as an entire transportation problem and consider how best to deal with it-retaining the competition that we can retain and using the new kinds of transportation for certain purposes, feeding and assisting perhaps the long hauls that have to be undertaken-in order to maintain a transportation system that will give our Canadian people adequate facilities at rates that the traffic can properly bear.
Those of us who come from the distant parts of this country, particularly those of us who come from the prairie provinces, are well aware of the fact that we must have the railways to move the heavy bulk commodities that cannot be moved in any other

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way advantageously. We must have the railways to move such things as wheat, coal, lumber, iron ore and so on, we must consider that traffic not only as eastbound or westbound from the prairie provinces, but we must consider how we can get some of these bulk raw materials into these provinces in order to build up some industry and diversify the industrial life of this country to the advantage of all Canada.
I think then that sooner or later we shall have to consider this transportation problem as not only affecting the railways but also affecting the entire transportation facilities of the country, the railways, trucks, busses, ships, planes and so on. We have entered an age when the railways, still vital to this country, are nonetheless only a part of the main transportation system of Canada.
It is proposed In this bill to amend the Railway Act to give the board of transport commissioners power to prescribe and maintain something of a uniformity of rates on certain types of goods. Of course this legislation does not deal with the rates themselves. They must be worked out by the board and by the railways and approved by the board. That is the reason why I so strongly support the suggestions that the board of transport commissioners be strengthened to the greatest extent possible. This is one of our most important boards. It deals not only with railway transportation, but with telephone rates and a large number of other matters that are of vital importance to the community in all parts of Canada. And as I interjected a moment ago when the hon. member was speaking, we must see that the board is provided with the means of acquiring and using the very best advice in accountancy and in legal matters and so on that the country can provide. I have been told by people who were very interested in the various rate discussions before the board that the staff of the board was overworked, and indeed was quite inadequate to meet the needs of the inquiry. Therefore we have to strengthen the board and provide it with facilities to do the kind of job we want it to do.
Of course one would have expected that the board would have found, as it did in its report, that the transportation disadvantages are heaviest on provinces away from the centre of Canada. That has been obvious, I think, in the many discussions that we have had regarding horizontal freight rate increases. I want to join my hon. friend in suggesting that no further horizontal increases be permitted at least until this legislation has been passed, and until we have an organization which can go into the matter thoroughly.

The horizontal increases that have been permitted in the past several years, and which we have criticized so bitterly, have caused greater discrimination and more burdens on those parts of Canada which had already been discriminated against. These increases have discriminated against the maritimes. The maritimes depend on central Canadian markets, and the relatively long hauls from both the maritimes to this area and from this area to the maritimes. Then of course the maritime provinces, like the prairie provinces, are engaged largely in primary production, production of heavy commodities. The commission itself stated that the maritimes' concern with the problem of shipping goods to and getting goods from central Canada had become acute as the result of post-war rate increases. And those of us who represent western constituencies, prairie or British Columbia, can join with them in saying that we have found that also. Lately the province of Newfoundland, though not associated with the seven provinces originally, has shown a good deal of apprehension regarding the freight rate structure and what may happen in the future because its transportation facilities, as we know, are not nearly as efficient as the transportation facilities in the rest of Canada. That I suppose is one of those understatements that one sometimes feels inclined to make. But our prairie provinces are even more subjected to discrimination, because of the long haul, than those parts of Canada that I have already mentioned.
The freight rate structure in the west is one that was built up on the basis of primary production, the production of primary commodities in the prairie provinces; but with the development of oil and gas in Alberta, and perhaps with discoveries of similar resources in the neighbouring prairie provinces there is now a considerable amount of diversification foreshadowed, and in the province of Alberta perhaps in sight. I will leave that for the hon. member for Peace River (Mr. Low), who no doubt will say something about it. Therefore there is a friction, as it were, between the traditional rate structure

the board says this very plainly.-and the drive for industrial development and diversification. This must be ended.
Coming to my own province, may I say that those who have read the brief submitted to the royal commission will have noticed that Saskatchewan emphasized that its economy is highly dependent on rail transportation because of the distance from markets, the high degree of economic specialization and the bulkiness of the products to be sold. I have already pointed that out. The

producers of Saskatchewan are farther from the markets of the world than are the producers of commodities of a similar sort anywhere else in Canada. Then, there is no ship transportation to make water competition possible in that province.
Owing to the fact that some 38 per cent of all the surveyed roads in Canada are in Saskatchewan, it indicates how great a problem it is to provide extensive truck and bus competition in our province. So far as Saskatchewan is concerned the freight rates have always been oppressive and discriminatory. The same sort of argument applies to British Columbia, removed, as it is, from the great markets of central Canada and across the ocean except by the long sea route through the Panama canal.
I was interested to note something else in this report that I should like to mention. That was an opinion recorded by one of the three commissioners, Dr. H. F. Angus. It was in the form of a comment on the commission's conclusions on the question of regional disadvantages. I should like to quote him in that respect because it is something I think we should keep in mind. At page 282 of the report I find this:
The complaints made by the provincial governments seem to me to concern the effect upon their people of national policies rather than the physical fact of distance from markets and sources of supply. They do not challenge these policies which comprise not only the tariff but the very maintenance of Canada as a separate nation; but they complain that too little has been done to compensate those who suffer economically as a consequence of these policies. This is not a complaint against the railways. It is a complaint against the federal government which, in effect, is asked to subsidize the railways in order to enable them to forgo high freight rates.
It seems to me that was a very significant note made by one of the commissioners. As he says, it does not deal specifically with the railways, but it does in part make it necessary for this federal House of Commons to consider some compensatory adjustments; and one of those, of course, is in connection with the railway problem.
I do not want to speak too long, but I should like to mention the $7 million proposal set out in the bill. That is a part of the so-called equalization plan. I suppose its aim is to try to ease to some extent the full effects of rate increases on the long-haul traffic and shipments of basic commodities, to some extent similar to the easements provided in connection with maritime rates. The royal commission recommended a subsidy of $7 million a year to be paid to the railways to help meet the cost of the railway bridge between east and west across sparsely settled northern Ontario.
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From my understanding of the bill now before us, this $7 million would go to the railways as part of their general revenue in return for equalizing the impact of rates between east and west, the attempt being of course to offset the disadvantages resulting from this bridge, as it is called, of 552 miles.
The commission quite properly pointed out that this east-west link is a long stretch of territory which originates very little revenue traffic. Then it was claimed that this payment would have the effect of relieving the railways of a liability for which they have to recoup themselves by means of relatively high freight charges on through traffic crossing over the bridge between east and west. I think we can all agree with that objective.
To justify this idea-and I thought this an interesting point-they draw an analogy between this section of track across northern Ontario and Canada's toll-free canals, which are maintained by the government at the public expense for the handling of water traffic. The commission thought that this subsidy would reduce the cost of moving goods from eastern Canada to the west, and it observed that eastbound traffic from the west already is aided by statutory low rates on grain and grain products.
The point I have in mind is this: What is the minister's suggestion for the basis of the payment of this subsidy? If we look at the wording of the bill we find this:
(1)	Subject to the provisions of this section, the Minister of Finance may, when authorized by the governor in council, pay out of the consolidated revenue fund (a) to the Canadian Pacific Railway Company an amount equal to the annual cost of maintaining the trackage between Sudbury and Fort William on its transcontinental line of railway, and
(b) to the Canadian National Railway Company an amount equal to the annual cost of maintaining trackage corresponding in extent to the trackage mentioned in paragraph (a) between Capreol and Fort William and between Cochrane and Armstrong on the transcontinental lines of Canadian National railways.
(2)	The Board of Transport Commissioners for Canada shall determine the annual cost of maintaining the trackage for which payment may be made under this section and shall fix the extent of such trackage in respect of each company.
There is of course a limit that the amount paid under subsection 1 shall not in any year exceed $7 million in aggregate. Then subsection 4 continues in these words:
(4) When the cost of maintenance of the trackage on the lines of railway specified in subsection one exceeds in any year the sum of seven million dollars, the payments authorized by subsection one shall be apportioned between the companies according to the amounts expended by each company on the maintenance of its trackage.
I would ask the minister to tell us what that means. Who is going to determine what

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those amounts are? How is this to be done? Indeed, one railway may put in a bill for the maintenance of trackage at a far greater rate per mile than the bill put in by the other railway for the maintenance of its trackage. How will the benefits of each railway be assessed in that regard? I suggest that is an important point, and it was the one the hon. member for Winnipeg North Centre (Mr. Knowles) had in mind the other day when, as we were discussing the resolution, he asked what formula the government had in mind in connection with the payment of this $7 million subsidy.
I agree with the view held by many people in the prairie provinces that this will be quite inadequate, particularly if it is put into the general revenue of the railways. I feel something more substantial has to be done. We know there were several proposals. There was a proposal to pay a subsidy similar to the maritime freight rates subsidy which today, I believe, is 20 per cent. There is a reduction discount in freight charges on maritime rail freight movements. The commission rejected the suggestion, however.
Then there was the Saskatchewan proposal which would have introduced subsidized reductions on all freight hauls within, into and out of the prairie provinces, with a somewhat wider application than in the maritime rates. This was estimated to cost $40 million a year as compared with the $9 million in the maritime provinces for, of course, much smaller tonnage. The commission rejeoted this proposal. But what I am pointing out is this, that while the government of Saskatchewan thought that a much larger subsidy, one amounting to $40 million annually, was justified, it does point up very clearly that the $7 million would appear to be quite inadequate.
While this measure is welcomed, of course -and do not misunderstand me-I repeat that while it is welcomed, what I have said expresses I believe fairly well the general view of people in the prairie provinces. However, when the bill is before the committee no doubt representatives from the several provinces will make their own case. Therefore I do not propose to do it at this time.
Having said this, and having offered some criticism, I wish it to be clearly understood that we welcome this legislation. But we welcome it as only one step forward. After all, in democratic countries we move by steps, and it seems to me that this is a step. As such we welcome it. But I want it to be clearly understood that we think the steps taken in this bill are inadequate to meet the needs of the country. If we are going to deal properly

with our railway problem we must not isolate it, we must consider it as part of the entire transportation problem of Canada.


Mr. Solon E. Low (Peace River):: Mr. Speaker, I think I should take just a few minutes of the time of the house this afternoon to place our views on record with respect to the bill now before us. We believe that the bill is sound in principle and we support it. It is true that we look upon its provisions as providing only half a loaf, but we in the west are grateful for what the minister has indicated he is prepared to do in order to implement the commission's recommendations.
The bill does not provide for the equalization of rates, but it does go quite a distance in removing unfair discrimination. We are very pleased with those provisions that do remove unfair discrimination in rates. We would have liked to have seen greater steps taken toward real equalization, but we realize that in a country such as ours there must be certain exceptions to the equalization principle, exceptions that probably would not have to be considered if our country was small and closely knit together and more uniform in its geographical and topographical features.
We can quite understand the necessity of maintaining the preferred position that the maritimes have enjoyed ever since the passing of the Maritime Freight Rates Act. We think that the maritime freight rates structure is perfectly justified and we have always supported the maritimes in their efforts to maintain that position. We have a great deal of sympathy for our brethren in the maritimes because we know something of the tragic effects which certain movements have had on their economy since confederation. We are ready to support their efforts to maintain their preferred position under the freight rates structure. We have never requested that the western provinces achieve equalization with the maritimes but we are anxious to achieve equalization with the central provinces.
Another exception which we understand as being necessary is the maintenance of the Crowsnest pass agreements. Those arrangements are essential in the interests of the western farmer and I am quite certain that without them the western farmer could not carry on today.


Major James William Coldwell: They are fundamental agreements.


Solon Earl Low: As the hon. member for Rose-town-Biggar says, they are fundamental agreements to be held in perpetuity. Under those circumstances we were happy that the royal commission suggested that they be not

abrogated in any way. There are other exceptions that we understand must be made in applying this principle of equalization.
We join with those who have spoken from this side of the house in asking that no further horizontal freight rate increases be granted to the railroads until this bill has been made law and is operative. We think that the railroads ought to be able out of their operation to recover enough to pay their costs, to keep themselves in a strong position, to renew equipment and get rid of obsolete equipment which they now have. We are certainly not attempting in any way to set aside the demands of the railways that conditions be laid down so that they can carry on successfully. We are prepared to support any move or any measure which will assist them to carry on, but we do not want any further horizontal increases granted until such time as the board of transport commissioners have in their hands this legislation in an operative form. Then we think they will be able to arrive at a proper judgment on the requests that are made.
Up to this time the efforts toward industrial development in the three prairie provinces- I am limiting it to those provinces at the moment-have met with only meagre success, largely because of the discriminatory freight rates structure. I do not believe there is anyone who can successfully argue against that proposition. In Alberta we have all the endowments necessary for successful industrialization, and the other provinces have many of these resources. However, Alberta is particularly fortunate in the diversity of its natural endowments. Oil and gas are in abundance and we have salt beds second to none on the North American continent, beds that we did not know existed until a comparatively few years ago.
We have great coal reserves, we have large timber resources, and I could go on and name many other resources, all of which would make possible a steady industrial growth. It seems too bad that our province has not been able to go ahead much faster with its industrialization program. We have tried to take advantage of every opportunity and many industries have been established there. But they were not able to make a success because they found themselves up against too great freight costs.
With all the resources that are presently visible-perhaps there are many not yet found-there should be a flourishing fertilizer industry in Alberta which would contribute to the well-being of Canada from coast to coast. If there is one thing this country needs more than another in the agricultural field, it is a sufficient supply of good fertilizer.
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We have all that would be required to manufacture such a supply but thus far freight rates have discriminated against the development of this industry.
I think we have everything that would be required to establish a basic plastic industry, perhaps as great as the industry in Europe, particularly in England. We have everything required for a successful woollen industry. We have the three fundamental essentials of coal, gas and salt for a huge chemical industry. I make the prediction that with the passage of this bill Alberta will eventually develop an important chemical industry that will add to the well-being of our great country.
I have spoken on several occasions about the possibility of developing a great steel industry in Alberta. I have no doubt but such an industry could be successful, provided the freight rates situation was cleared away to the point where it would be economical to haul coal eastward, haul iron ore westward and haul the manufactured basic products to wherever the markets might be. I can see no reason why, under a revised and more equalized freight rate structure, iron ore from Steep Rock in western Ontario should not find its way into the coal beds of southern Alberta and there be manufactured and fabricated according to our needs. In all of these things I believe that this bill will be of considerable help.
I think it is important and desirable that the economies of the western provinces be balanced. For quite a long time we have suffered under the disabilities that go along with wheat economies. These wheat economies are subject frequently to disasters as to which very few people have any understanding. This year, for example, the prairie provinces have suffered a tragedy that has not been visited upon us for fifty years or more. We have had too much moisture, and that is not an ordinary thing at all. Usually the cry is that we have not enough. We have frequent droughts.


Howard Charles Green: You got all our rain.


Solon Earl Low: We evidently got all the rain that was supposed to have been dropped on the people of the Pacific coast. All this moisture delayed our seed time and our harvest with the result that harvesting is only about 40 per cent completed. As I say, our economies have been subject to tragedies that we could obviate to a great degree by having a measure of industrialization that will balance them and perhaps mitigate to some extent the extreme disabilities of wheat economies. I think that much of the assistance to western farmers might be obviated by a greater degree of industrialization. I leave

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it at that. I impress upon members of the house that the bill will lay down better conditions and will result, I am satisfied, in some stimulation at least of industrialization in the western provinces. We must not overlook the fact that as the well-being of the people of any part of Canada is improved that very thing contributes to the strength and well-being of all of Canada.
I only wish to make one brief comment on the portion of the bill which deals with the $7 million subsidy. I was interested to note this statement by the commissioners at page 253 of the report of the royal commission on transportation:
The submission of the United Farmers of Alberta Co-operative Limited above set out before refers to the expense which ought to be borne by the federal treasury as "a percentage of the operating costs" incurred by the mileage traversed between Sudbury and the head of the lakes. There is really no practical difference between the idea expressed in that formula and the measure recommended here which is intended to attain a similar result by the application of another formula, that of charging the general revenues of the country, not with any part of the actual cost of operating trains in this middle area, but with the whole cost of maintaining the bridge over which the traffic between the two large areas must pass, just as the toll-free canals in central Canada are maintained at public expense for the passage of traffic through them.
At first when I examined the wording of the bill I had to ask myself what maintaining the trackage actually meant. It occurred to me that it was a rather narrow expression which did not have any too much specific meaning. There are many other things that enter into the cost of railroading besides the mere maintenance of right-of-way. I thought as I read the bill, and then referred again to the submission made by the United Farmers of Alberta Co-operative Limited with respect to a subsidy, that we might perhaps have found a little happier way of expressing what we wanted to get at. However, after I had given the matter more consideration I came to the conclusion that because there is a dollar value placed upon the assistance that is to be granted out of the general revenue fund of Canada it did not make too much difference how the statement was worded.
One thing that seems to me to count is that the amount will be allocated to the actual operation and shown as a credit to that operation so that everybody can see it there, and so that if the railroads ever have the inclination to come and ask for further increases in freight rates they will not be able to hide that amount at all. It will be right there and allocated to that portion of the line between Sudbury and the head of the lakes. Therefore while "trackage" might appear to be pretty narrow, nevertheless since the amount that

we are going to grant will be a subsidy and will be reflected in the rates I have no objection to it at all.
I want to end on this note. I quite agree with what the minister said this afternoon, and I want to emphasize it again. Let us not attempt in any way to make this committee a second royal commission. I think that would be a terrible mistake. I should like to see the work proceed with such dispatch that we can have the bill reported on by the committee and passed by the house at this session. I think it is important and essential in the interests of Canada that it be done that way. I want to thank the minister and his colleagues for bringing in the bill. We want to thank him for the efforts he has made to correct these ills-I will not make it stronger than that-in our transportation system. I want to say to the minister that we will give him all our support in getting down to a detailed study and putting this measure through.


Mr. J. H. Dickey (Halifax):: Railway Act
As to the special interests of the maritimes, I think we find in the Maritime Freight Rates Act the protection that we require. In previous stages of this debate certain members of this house have taken upon themselves the role of prophets and have said that this legislation will have the most severe effects upon the transportation system and the freight rate problem in the maritime provinces. I am not going to join them in prophecy, except to say that any statement to the effect that there is in this legislation anything which indicates that freight rates in the maritime provinces will be increased 100 per cent is absolutely fantastic. There is nothing in this legislation which can bear that interpretation. Any statement of that kind must be based upon some information or something quite outside the report of the royal commission and this particular bill. In dealing with a matter as complicated as that of freight rates I do not think anybody can predict with absolute assurance as to particular situations when dealing with general provisions of this kind. But if there is anything in this legislation which would have anything like the effect which has been suggested by certain hon. members in previous stages of this debate- and I do not for a moment believe there is- it is my opinion that any result of that kind is directly contrary to the provisions of the Maritime Freight Rates Act and cannot be brought into effect.


Mr. Browne (St. John's West):: It is too late to stop when it is brought into effect.


John Horace Dickey: It is not a question of being too late when it is brought into effect. There is existing legislation which will prevent it being brought into effect, and it will never come into effect.


William Joseph Browne: Mr. Speaker, may I ask the hon. member a question?


John Horace Dickey: Certainly.


William Joseph Browne: What is the hon. member's interpretation of the subsection he refers to, namely subsection 4 of the new section 332A? Would he tell us that?


John Horace Dickey: For what it is worth, my
interpretation is that it makes any action taken under section 332 subject to the provisions of the Maritime Freight Rates Act.


William Joseph Browne: That is what it says; but what does it mean?


John Horace Dickey: Strange as it may seem, it means exactly what it says.


William Joseph Browne: That is what you think.
LMr. Dickey.]


John Horace Dickey: If my hon. friend cannot understand plain language, then I am afraid that I cannot elucidate any further for him.
There are one or two other aspects of this legislation with which I should like to deal briefly. The first is that under this legislation the board of transport commissioners is for the first time being given the power to examine competitive rates. What the result of the examination of competitive rates by the board will be it is impossible at this stage to say with assurance. But with that power given to the board by this legislation we shall have the assurance, which we have never had before, that any competitive rate that a railway brings into effect must be in truth competitive; that the competition must exist, and that the rate proposed as a competitive rate is sufficient to reimburse the railway for the services performed so that it will not be in the position, for purposes of competition, of performing expensive services at a ridiculously low figure, recouping its losses from some other traffic.


Mr. Johnston:: What about the agreed
charges clause?


John Horace Dickey: If my hon. friend wants to
deal with that matter, that is fine; but I was particularly interested in the competitive rates, as I will now show. I think that is something which is of particular interest to western Canada and to the maritimes because of our feeling that in many instances-having regard to the low freight rates enjoyed by shippers in central Canada because of the competition of water and truck transportation-we were paying the bills for some of the services the railways were giving in central Canada. It will now be possible for the board to look into that situation and make sure that the freight rates structure in some parts of Canada is not bearing an unfair burden in order to maintain services in other parts of Canada.
Another matter I should like to mention is the action being taken under this legislation to deal with the question of transcontinental rates. That action will have a distinct effect on the freight rates on traffic both east and west, between the maritimes and points in western Canada; and I would hope that the bringing into effect of this provision will result in a substantial reduction in the tariffs in both directions for traffic of that kind.
We in the maritimes might perhaps think that the provision with regard to the $7 million subsidy to maintain the trackage in northern Ontario is of little interest to us. That is not a proper conception. The savings that will be made possible through that

subsidization scheme will also have the effect of reducing the through rates from the mari-times to the prairie provinces and from the prairie provinces to the maritimes. That will be another benefit added to the readjustment of the transcontinental rates.
In conclusion, Mr. Speaker, I should like to say only this. I wish to compliment the minister on having brought down this legislation. Along with other maritime members I am delighted at the obvious unanimity of the opposition parties in support of the principle of this legislation, no matter what the small disagreements may be on detail. I will support, with a great deal of pleasure, the motion for the second reading of this bill.


Mr. G. C. Nowlan (Annapolis-Kings):: At
the outset I should like to join with the senior hon. member for Halifax (Mr. Dickey) in his reference to the chairman of the board of transport commissioners, Mr. Justice Archibald. It was my pleasure many years ago- more years than one likes to recall-to be recruited into the army by Mr. Justice Archibald who was then a recruiting officer for the old 10th battery, associated with Halifax for many, many years. I followed him overseas and afterwards into the law school, and became associated with him after he became a judge of the supreme court of Nova Scotia. I appeared before him on many occasions. He is a man of great integrity, a man with a sense of public duty and responsibility, that forced him to efforts possibly beyond his strength. I am sure everyone will regret that owing to ill health it has been necessary for him to relinquish the position which he has filled so honourably in the past.
I cannot possibly follow the hon. gentleman in all the other comments he made with respect to this bill. He warned against one becoming a prophet, and I will attempt to avoid that category, though the hon. gentleman himself prophesied that nothing but good would flow from this bill. I hope his optimism is justified.
This is, as everyone has said, a most important measure. The bill itself deals with many matters. As the minister pointed out, it deals with everything from passenger tariffs to the appointment of the board and various matters such as that; but those of us from the east and the maritimes are in agreement that section 332A is the important section of this bill. It is that section to which I shall draw the attention of the house this afternoon, with particular reference to any possible implications to the maritime provinces. The marginal note of section 332A reads: "National freight rates policy." We are laying down, apparently, a national
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policy with respect to freight rates. If that marginal note is a correct description-and I think it is-then it might easily follow that this legislation may be as important as any we may pass this session, at least in so far as its effect on some parts of the nation is concerned. This bill in setting forth this national policy says:
It is hereby declared to be the national freight rates policy that, subject to the exceptions specified in subsection four, every railway company shall, so far as is reasonably possible,-
And omitting a few words which are not material to the meaning, we read these words:
-charge tolls to all persons at the same rate, whether by weight, mileage or otherwise.
Section 2 (a) reads:
To establish a uniform scale of mileage class rates applicable on its system in Canada. . .
And so on. Then we come to paragraph (b) which reads:
To establish for each article or group of articles for which mileage commodity rates are specified, a uniform scale of mileage commodity rates. . .
In other words the emphasis in this section, Mr. Speaker, is on the mileage; and in that it follows of course the report of the royal commission at page 126, section 9 (b), which reads:
The establishment of one uniform equalized class rate scale throughout Canada applicable on each of the two major railway systems, expressed in mileage distances or in specific rates between all specified points on each railway. . .
There again, Mr. Speaker, the emphasis is on the mileage and the uniformity of the rates. I am certainly the first to admit that I would not want to enter into a technical discussion of the rate structure, how rates may be applied or how they are created; but in reading these sections it would appear to me that it would be a fair question to ask whether what is proposed in these sections of the bill is the establishment of a new rate structure in which at least milea|e is going to play a very prominent part, more so than it has in the past. We all know of the complicated structure we have had with its various rates, its various qualifications, additions, arbitrary structures and so on, which frankly confuse most laymen and many lawyers. I do not think I would be reflecting upon most of the members of the House of Commons, including many of the legal profession and certainly myself, by saying that they have often baffled us and still do. I am suggesting that with that background, on reading these sections it would appear that with this uniformity to which reference has been made we are having a simplification in which the rate in future is to be based largely on mileage. If that is so, Mr. Speaker, the effects can be very

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serious indeed, and particularly I suggest they would be serious to the maritime provinces.
The fact that the maritimes have a long haul is known to all. It does not require any great argument to establish it. In their report the royal commissioners dealt with that. They presented an analysis of waybills showing the relative haul of central Canadian points and also of the maritimes, and at page 28 they say:
The waybill analysis indicates that approximately 93 per cent of the freight traffic originating in the maritime provinces moves on commodity rates and that the average haul per ton is 319 miles, but that about 30 per cent of the 93 per cent moves on the average from 733 to 812 miles.
In the next paragraph they go on to say:
On the other hand, while approximately 80 per cent of the freight traffic originating in central Canada moves on commodity rates and the average haul per ton is 234 miles, approximately 90 per cent of this, on the average, moves from 80 to 167 miles. It will thus be seen that, compared to central Canada, the maritime provinces do, at least on a large part of their originating traffic, suffer a disadvantage in respect to length of haul.
It does not need a royal commission to tell us that Mr. Speaker. The 'history of our transportation system ini the maritimes is well known. I do not think some of us are cynical, but when we hear today about the construction of transportation systems and the great benefits that will be derived from them, we recall statements which were made about transportation systems in the past, and the history of them. I think the history of ours is well known; at least it is well known to the maritimes. Briefly, the old government railway was constructed for what purpose? To keep the movement of goods and troops as far away as possible from that country to the south of us which we now call our good neighbour. When that road was built it was expected that there might be a war at any time; so what happened? They built *the railway from Halifax to Montreal, and they followed the coastline just as far away as possible from the nearest United States point. You have this long, tortuous, twisting haul running up the bay of Chaleur and the Matapedia valley, and finally "down the St. Lawrence river to Montreal. That in itself was a part of the national policy of that time which created the transportation system. That makes our situation in the maritimes very very difficult indeed. Not only is it a fact that the long haul is there, but there is the other fact. We have to use that haul because of national policy, and also because of international policies. The situation in the maritime provinces is such that the goods we produce are now largely sold in central Canadian markets, and to a great extent we are dependent upon those

markets for consumer and other goods, including capital goods, which we have to buy.
That is a situation ahout which we do not complain. It is the situation to which the hon. member for Rosetown-Biggar (Mr. Cold-well) referred earlier this afternoon, due to the incidence of national policies and later on of international policies, and I refer to the loss of sterling and other markets, to the exchange situation and the like.
We are now at the end of that long, attenuated railway line, the only saving feature of which is that it is run by most efficient men in a most efficient manner; and the minister and his department can share the credit for that. I say it is well run, and that is a compensating feature in the situation. It is because of that fact that some of us in the maritime provinces are concerned about any change in the freight rate structure which could be attributed to a mileage basis.
May I say in parentheses that I appreciate very much what the minister said at the outset, namely that this bill is to go to a committee and that it will be there studied without any commitment as to details. That clarifies the position of all of us in the house today, and I welcome what was said. But to go back to my original thought, if it follows that because of the changed basis we do have substantially increased rates, then- and I am minding the advice of the hon. member for Halifax (Mr. Dickey); I am not donning the robes of a prophet-I would say that the effects on the maritime provinces would be just as serious as were the effects of the collapse of the wooden ship-building industry in the maritimes; and that was the most disastrous situation we ever had. That is how serious the position may be.
I am not for one moment overlooking the matter which the hon. member for Halifax stressed, and rightly so: that the section we are considering embodies the safeguard of the Maritime Freight Rates Act. He stressed that, and I think from the argument he advanced he was justified in so doing. I am glad he appreciates what the Maritime Freight Rates Act has done for the maritime provinces, and for Nova Scotia in particular. I am sure all of us are glad to see sitting in the house this afternoon the hon. member for Cumberland (Mr. Black), who was a member of the government of Nova Scotia responsible for the setting up of the Duncan commission, out of which flowed the Maritime Freight Rates Act, to the benefits of which the hon. member for Halifax referred. I say that because the Maritime Freight Rates Act was the climax of a long period of stress and demand in the

maritime provinces, sparked to a great extent by Senator Dennis and the Halifax Herald, which culminated in the creation of the Duncan commission, from which flowed the Maritime Freight Rates Act. That was in 1927.
Again, without going into technical detail and without becoming involved in arguments as to the application of the act, as I read and understand it the act said that it scrapped the rate existing in 1927 and set up a new rate 20 per cent below the one then obtaining. That 20 per cent was arrived at because the commission found that until 1911 or 1912 the government of Canada had recognized its responsibility under its national policy and had not raised the rates in the maritimes, but that following 1912 the rates had been raised to such an extent that the Duncan commission decided a reduction of 20 per cent would compensate for it.
So we find this 20 per cent statutory reduction becoming effective. But the act went on to say that the board of transport commissioners could change the rates if it found under certain circumstances that the costs justified it, and so on. As a matter of fact, the benefits of the act-and I believe many will agree with this-have been lost to a great extent because instead of the rates being increased they were decreased because of truck competition. I am not so sure what benefits are flowing from the Maritime Freight Rates Act today. I sometimes wonder if those of us in the maritime provinces would not be in a better position if the act were revised and amended, because we hear it said, as was said today by the hon. member for Peace River (Mr. Low)-I am sure quite innocently-that we are in a preferred position under the act. Every once in a while we hear talk about handouts. Actually none of these things take place. As I said, I know the hon. member for Peace River spoke in a kindly way, and I appreciate the position he took. I would point out, however, that we do not have a preferred position: it may have been at one time, but certainly it is not today. And I repeat that there are no handouts under it.
I may be wrong, but the picture as I see it is this. If there is a change in these rates, and if as a result of equalization the board of transport commissioners decides to raise the rates, then what happens under the Maritime Freight Rates Act? We have been getting 20 per cent off. With a rate of $1 today under the act we pay 80 cents, with the 20 per cent off. So if the board were to raise the rate to $2, as it might do, and as it can do under the act-I see one hon. member disagrees by
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shaking his head-what happens? I shall not argue with the hon. member, but I am saying such an increase is quite possible. The power is in the board to revise those rates. If they were to raise them to $2, what would be the result? The result would be that instead of having a rate of 80 cents we would have one of $1.60. That is too high. It might strangle the little bit of trade that is going on in that particular item? If you are going to kill a man, it does not matter whether you cut off his head at the neck or saw him in two at the middle. The result is just the same; he is dead. It makes no difference in freight rates, that you have a theoretical or statutory reduction of 20 per cent, if after the rate is reduced by that 20 per cent it is still so high that your trade is strangled. You die, economically. And, as I see it, that is a possibility under the freight rates act. What I say is not based entirely on supposition, either, because if one turns to page 126 of the report of royal commission he will find this:
8. The hoard has requested the railways to submit to them the railways' proposals for equalization of freight rates throughout Canada subject to statutory prohibitions contained in section 325 of the Railway Act and in the Maritime Freight Rates Act.
In other words the royal commission asked the railways to submit briefs based upon this proposed equalization. They were anticipating that parliament was going to pass this measure. But they wanted the team all harnessed and ready to drive through the gate as soon as parliament had opened it.
As a result, what happened? The railways submitted their schedule of rates, and they did so having in mind the very safeguards the hon. member from Halifax discussed a few moments ago, which he says give us protection. They submitted those rates. The railways may be wrong; they may not know what they are talking about, but I think it is generally recognized that they employ a fairly good legal staff. They have had great experience, and I suggest that when the railways submitted rates under that instruction from the royal commission they first considered the effect of the Maritime Freight Rates Act and the safeguard set out in subsection 5 of section 325 of the Railway Act.
I have in my hand an interview with Mr. Rand Matheson, manager of the maritime transportation commission. That is a commission for which the boards of trade in the maritime provinces are largely responsible, and is financed by the governments of those provinces. Mr. Matheson is to some extent a quasi-public servant or civil servant, and is recognized as a freight rates authority in the maritime provinces as well as throughout
450

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Canada. He gave an interview to the Halifax Chronicle-Herald some time in September and is quoted as follows:
Proposals by the Canadian railways for equalization of freight rates-


Mr. Deputy Speaker:: I am sorry to interrupt the hon. member, but it seems to me that he should confine his remarks to the principle of the bill.


George Clyde Nowlan: I am dealing with the
principle of the bill. I am dealing with equalization. I think we all agree that at least to maritimers equalization is an important part of this legislation. Dealing with equalization Mr. Matheson continued:
. . . across the country would approximately double present rates in the maritlmes, and would thereby have detrimental repercussions of far-reaching consequence on the economy of the four Atlantic provinces.
That is not the statement of a prophet; that is not the statement of a politician. That is the statement of a recognized expert in the maritime provinces dealing with this matter. He gave certain examples. For example, the first class rate to Moncton in carload lots is $1.87 per hundred pounds, the fifth class rate is 94 cents. The proposed new rate would be $3.70 for first class as compared with $1.87, and for fifth class, $1.48 as compared to 94 cents. In the case of the first class rate you would have a percentage increase of 97-9 which is as near as you can get to a 100 per cent increase. In the case of the fifth class rate the increase would be 57-4 per cent. Perhaps Halifax is concerned in this. At present the first class rate per hundred pounds is $1.94 and the proposed new rate, according to Mr. Matheson, will be $4.23.


Lionel Chevrier: May I ask the hon. member to what he is referring when he mentions proposed new rates?


George Clyde Nowlan: I warned the minister that I did not want to be involved in any discussion on this, but these are the rates proposed by the railway companies to the board of transport commissioners as a result of paragraph 8 on page 126 of the report.


Lionel Chevrier: I do not want to interrupt the trend of thought of my hon. friend, but this legislation does not deal with any rate. This legislation provides enabling authority which will permit the board of transport commissioners to equalize freight rates. When my hon. friend refers to a proposal submitted by the railways I contend that he is not in order because there is no such proposal before this house. I submit further, although I am not going to stop my hon. friend because I want him to put on the record everything he wants to, that he is dealing

with a . matter now before the board of transport commissioners for investigation and which has been adjourned until January 10. I submit that this matter is sub judice and should not be considered now.


Howard Charles Green: If I may rise on that point of order-


Lionel Chevrier: I did not raise a point of order, I simply asked a question. Having been answered I stated that there is nothing in this legislation which permits the hon. gentleman to deal with a proposed increase in rates.


Mr. Deputy Speaker:: There is no point of order before the house. There is only the question asked by the minister.


George Clyde Nowlan: As the minister said, this
matter has been adjourned to January 10. It was before the board as a result of the report of the royal commission to which the minister referred. The minister has introduced a bill implementing some of those recommendations. It was the report of the royal commission that permitted the companies to file this tariff. It is true that it is most unusual to have tariffs filed with the board of transport commissioners before parliament had seen the bill, but that is what happened.


Lionel Chevrier: Will the hon. member agree that the matter is now before the board of transport commissioners for adjudication?


George Clyde Nowlan: I think that is correct.


Lionel Chevrier: If it is, does the hon. member think he should discuss a matter under investigation?


George Clyde Nowlan: I do not think it is a question of discussing a sub judice matter. I think it is proper to refer to a public document which is factual and to read what is stated in that document without attempting to draw any conclusions.


Lionel Chevrier: I do not intend to continue my interruptions. I disagree with the hon. gentleman, as I think the matter he has brought up is one which should be discussed before the committee. I hope that Mr. Matheson will come forward and make the representations there which are included in this article.


George Clyde Nowlan: I am not pursuing the matter further. I have placed some of these figures on the record, whether they are sub judice or not. These are the submissions of the railways based on the suggestions of the royal commission, having in mind all the safeguards to which reference has been made. I say to you that if the railroads are not entirely insane, if the figures they have submitted

have any relevancy at all, these safeguards will be of very little use and the maritimes will face a situation which could be described as verging on disaster.
I realize that if one feels strongly about a bill up for second reading he should consider whether he will vote against it, and I wondered what attitude to take. However, I would not want to take that position at this time; and I do not intend to, because this bill is to be referred to a committee. I did feel better, as I said earlier, when the minister said that even the government was not to be committed to the details of this bill until it had been referred to the committee. There must be some misgivings or doubts with respect to it, and I think properly so. We hope and believe that this committee will call representatives-of course they will not call all those who appeared before the royal commission-of the maritime transportation commission and from other areas in Canada who are interested in this situation, because it is a most serious thing for Canada.
It is not altogether a railway problem. I am not blaming the railroads for having proposed rates such as they have. I intended to read the quotation from Dr. Angus which the hon. member for Rosetown-Biggar (Mr. Coldwell) quoted earlier; but to summarize it, he said that it was not a railway problem, it was a complaint against the federal government which in effect is attempting to subsidize the railways in order to enable them to forgo higher freight rates.
I presume the minister has read the statement by Dr. Innis, and I draw his attention particularly to page 307 of the report where Dr. Innis states:
No scheme of equalization can be devised which will overcome the effects of competition in the St. Lawrence region as reflected particularly in competitive rates. An obsession with equalization will obscure the handicaps of the maritimes and of western Canada and perpetuate their paralyzing effects.
"Obsession" is the descriptive term used by Dr. Innis with respect to equalization. Whether you like that or not, Dr. Innis was one of the commissioners and is recognized as being something of an authority. I suggest that when you read those words you must wonder just what effect should be given to this proposal of equalization.


Lionel Chevrier: Dr. Innis signed the report.


George Clyde Nowlan: That is perfectly true. He signed the report, and he also referred to this obsession about equalization. How he reconciled that is not for me to say. Apparently it was not a difficult task, and I do not presume it was. There is one other matter to which I should like to draw attention with respect to equalization, and I think this is the 94699-291
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classic statement of the year. If you will look at page 124 of the report you will find this statement half way down the page:
The maritime provinces said that they did not "subscribe to or support so-called equalization of freight rates" and stated "rate equalization is impossible of achievement."
That is on page 124, and on the very next page-


Lionel Chevrier: May I ask the hon. gentleman to keep on quoting because I think the next sentence is very material.


George Clyde Nowlan: Surely. It reads:
Accordingly they opposed an amendment to the Maritime Freight Rates Act submitted by the Canadian Pacific Railway Company as being essential to the bringing into effect of an equalization plan.
If that is material I am very glad to quote it. I think the material thing is that they said they did not subscribe to or support so-called equalization of freight rates. Then on the very next page I should like to refer to the first conclusion of the commission. It reads:
It would appear, from the foregoing and having regard particularly to the terms of order in council No. P.C. 1487, that the broad general principle of equalization throughout the country is now accepted.
There you have the statement on one page that the maritime provinces oppose it and refuse to accept it, and on the next page the bland statement by the commissioners that the country generally accepts it. Apparently the maritimes are no longer a part of this country, if you accept that statement.
I am sure the minister did not do it purposely, but I do not think even he is entirely free from fault on that score because I noticed that the other night when referring to this matter he said, as recorded at page 329 of Hansard:
The provinces asked for equalization, and by these bills the government intends in so far as is possible to implement the recommendations of the royal commission on equalization.
It is true that some of the provinces asked for it, but certainly not all the provinces, and some were definitely opposed to it. It is true, as the hon. gentleman said the other night and as he said to me again a few moments ago, that the bill in itself does not provide specifically for an increase in freight rates. There is no increase spelled out there but the bill does provide for equalization, and it at least can be argued and I think will be argued with some trepidation in many parts of the country until the committee meets and dispels the view that equalization can, and possibly does, involve a substantial increase in freight rates. Therefore indirectly that could flow from it.

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As I said a moment ago, we are to have this matter referred to a committee. Perhaps it would have been better if the principle had been referred without the bill itself, but the minister explained why that could not be done. I believe and know that an opportunity will be given to representatives of various parts of the country to appear before the committee, not to rehash all the old arguments of the past but to state the position taken by certain districts in this nation, and I am sure all members of the house on either side will respect and try to meet the views of those areas. I think it can be done; but if it cannot I want no misunderstanding that, in accepting second reading of the bill this afternoon, so far as I am concerned at least I am definitely committed to opposition to the principle of equalization.
After the committee has reported, after they have heard these people, if a solution can be arrived at whereby rights can be safeguarded, or it is shown that they are not prejudiced-and that is a matter on which we certainly are ready to be convinced-then we will all join very happily in supporting a bill which, as has been pointed out, has many interesting and valuable features. Until that can be done, however, I at least reserve the right to take such action on the bill as I think is in the interests of the maritimes after all the facts have been disclosed.


Mr. Clarence Gillis (Cape Breton South):: Mr. Speaker, ordinarily I would not at this time discuss the bill at all in view of the fact that it is going to a committee, but I think discussion in the house is necessary on this measure. First of all, there are a lot of members in the house who will not be on the committee, and the fact is that the bill represents the government's considered opinion as to what they may do with regard to implementing the report of the royal commission on transportation. The commission was appointed in December, 1948, and reported on February 9, 1951. It was gathering evidence for a period of twenty-five months, and all the government has in mind in implementing the commission's report is the bill now before us.
The bill has many implications. While it does not spell out increased freight rates and so on, by the reorganization of the board and the new powers being granted to the board the government is placing in the hands of the board of transport commissioners the right to do a lot of things on which the hon. member who has just taken his seat elaborated. That is why I think the bill requires considerable discussion on the part of members in the house. If it is the intention of the government to set up another royal commission, through the committee, and if the
IMr. Nowlan.]
committee is going to take the bill and call in all the people whom it took the royal commission on transportation twenty-five months to hear, there will be a few sessions of the house go by before the committee is ready to come to a conclusion on the bill.
Another thing I am rather sceptical about is that many representations with respect to freight rates and the railroads generally that were made to the commission, and upon which the commission at least rendered some judgment, have been ignored in the bill. If the committee takes the bill in its present form and goes into session, the chairman of that committee will hold the members strictly to the terms of the bill. He will not permit a discussion of any matter not covered by the bill. That is why I am going to have a little fun with it at this time rather than wait for the committee.
The first thing I should like to point out is that the only thing the bill definitely does is grant $7 million to the railway companies for the purpose of maintaining that bridge in central Canada. In my opinion the main problem the railways have to contend with, and one which the president of the Canadian National Railways pointed up very strongly in a special submission to the commission, is the reorganization of the capital structure of the Canadian National Railways in particular, and at the same time we should have a good look at the capital structure of the Canadian Pacific Railway. I think that is the basis of all our trouble. You go merrily on with a capital structure on both railroads that is faulty and out of date, and should be changed. Before you can get any sanity in fixing rates on the railroads you have to start at the root cause, which in my opinion is the capital structure of the Canadian National, and at the same time take a good look at the Canadian Pacific Railway.


Lionel Chevrier: Would the hon. member
permit not an interruption but merely an observation?


Clarence Gillis: The minister is going to try to rule me out of order.


Lionel Chevrier: No, this bill does not deal with the financial structure of the Canadian National Railways. We may deal with that at a later date. This bill deals with equalization, and I hope the hon. member will speak on that subject.


Clarence Gillis: When I started I was careful to point out that we are dealing with the royal commission report.


Lionel Chevrier: No, we are not.


Clarence Gillis: Let me read from the explanatory notes.
The bill contains certain proposed amendments to the Railway Act arising out of the royal commission on transportation.
It so happens that the basis of the bill is that commission's report.


Lionel Chevrier: May I remind the hon. gentleman that we do not deal with the explanatory notes of the bill at this juncture. We are dealing with the bill itself, and not with the royal commission report.


Mr. Deputy Speaker:: Order. It seems to me that the principle of the bill is the principle of the amendment.


Clarence Gillis: Well, Mr. Speaker, you are the boss so far as that is concerned. There is no point of order; it is a matter of a difference of opinion. It is not my opinion; I am taking the bill itself, which sets out that the basis is the report of the commission which sat for twenty-five months. The government is recommending this legislation based on the evidence presented to the commission. The bill was written by the government, but if I had written it I would have said something about the capital structure of the Canadian National. I would have put first things first. I am not going to elaborate on that. I mention it because I sat on the committee on government owned railways and shipping, and listened to the president of the Canadian National Railways state that one of the main difficulties in financing that road was the fact they had inherited the sins of the companies they had taken over. The interest on that debt of around $63 million which the Canadian National has to pay each year is tremendous, and the royal commission recommended a change in the capital structure as one of the first things that should be done to straighten out the financial position of that railroad. Unless we tackle that angle, there is not much use talking about fleecing the public by increasing freight rates in order to pay interest on bonds that either should have been called in years ago or written in as equity capital drawing no interest. Until we tackle that problem I do not think we are going to straighten out this problem of freight rates.
I want to say a word concerning the principle of the bill, which is equalization. I agree with the maritime transportation commission that there is no such thing. It is impossible to equalize freight rates in Canada unless you can change the geography. The senior member for Halifax (Mr. Dickey) seemed to think the Maritime Freight Rates Act was not affected, but it is badly affected. When the act was passed in 1927 that 20 per cent rebate
Railway Act
which was granted was based on the prevailing freight rates. That percentage was considered fair and equitable. It placed the maritimes on a somewhat competitive basis with the rest of the country. Since that time there has been a 47 per cent increase in freight rates. What has happened to the Maritime Freight Rates Act is that we have lost 27 per cent of the value of it. Because of the increased freight rates that tariff has been placed against the products of Nova Scotia that have to go into the central market. The Maritime Freight Rates Act has been affected in that way, and the member knows it. He knows there is a lot of dissatisfaction in Nova Scotia on this very point. I have a clipping in my hand from Saint John, New Brunswick, dated April 13 of this year, in which the mayor is forecasting that certain industries in Nova Scotia would have to close down because of increased freight rates. I believe that is true.
If you are going to retain the benefits of the Maritime Freight Rates Act as they were intended when the act was passed-I may say it is not a handout but a recognition of the difficulties brought about by our geographical position and by confederation, and I hope the minister is paying strict attention to this- the maritime freight rate subsidy has to be increased to 30 or 35 per cent. While theoretically the benefits of the Maritime Freight Rates Act are not going to be interfered with, that 20 per cent granted before the 47 per cent increase in rates is not going to be retained unless the rebate is increased to equal the rate increases.
At the present time it is rather difficult to put the products of Nova Scotia into the central market to compete with manufacturers in Ontario and Quebec. Because of the short haul the freight rates in Ontario and Quebec have not changed very much. These provinces have not been sufficiently affected to appear before the board to make representations. With these increased rates the maritimes cannot compete with central Canadian industry. That is not my opinion; it is the opinion of editorial writers and experts who have considered the matter. The Maritime Freight Rates Act will not be effective unless you grant the same percentage of rebate as the increases which the board grants to the railways.
I said a moment ago that we should take a look at the position of the Canadian Pacific. I believe one of the first steps should be the reorganization of the capital structure of the Canadian National Railways. The president of the Canadian National has made a similar statement in a committee of this house and before public bodies right across this country. It is alleged that in considering the position

Railway Act
of the Canadian Pacific Railway the board of transport commissioners allowed the Canadian Pacific to exclude from the annual income of that road about $27 million from steamships, hotels, and other sources. Why should they? Why should that amount be excluded from the earnings of the railway for the purpose of rate fixing? I think the time has come when the government have to get tough if they are going to protect the general public. You cannot keep on loading freight rates on the back of the public to pay interest on the old bonds of the Canadian National Railways, and you cannot allow the Canadian Pacific Railway to hide that amount of revenue in its balance sheet and say "We are going to keep this to distribute to our shareholders, and you are going to get out and bleed the public in order to market commodities across the country". I am really a little bit afraid of this bill because, after twenty-five months during which that commission sat and with all the evidence it received and all of the recommendations that were made, as far as we know at the present time this bill represents the government's thinking on the implementation of the report of that commission. As I said a moment ago, while it is not definitely stated that the rates are going to be stepped up, as indicated by the hon. member for Annapolis-Kings (Mr. Nowlan) in this bill power is given to the board of transport commissioners to do that very thing, if we agree with the principle of equalization; and to equalize freight rates in this country you have to wipe out the Maritime Freight Rates Act.
Is it meant that there is going to be just a flat rate right across the country? That is what equalization means to me. If that is what it means, then it means there will not be any Maritime Freight Rates Act or any Crowsnest pass rates either. It is all very well to say: oh, the board will never do that kind of thing. In this bill authority is being given to them to do that if they want to. That is why I think a great deal of discussion is necessary in the house. I do not think equalization can be brought about without causing a great deal of upset in the whole structure.
The thing I wanted to impress upon the minister is the failure to do anything about regulating that capital structure of the Canadian National Railways and to take a realistic position about the Canadian Pacific Railway in reporting their income. Unless you can fix a base as to what the revenues of these railroads are from legitimate sources and wipe out all these manipulations that take place

at the present time, you are not in a particularly good position to go to the public and honestly ask them to pay more freight rates across the country.
I am not going to say any more at this time, Mr. Speaker; but when this bill goes to committee, I hope the chairman of that committee will do as the minister thinks he is going to do. I hope he will allow a broad, wide open discussion on this whole question of the equalization of freight rates and that there will be an opportunity to call in witnesses from the various parts of the country. To me the bill means that you are either going to do something about that commission's report or you are not. Judging by the bill in its present form, I would say you are not going to do much about it except to put on more commissioners, raise their salaries, give them the right to equalize freight rates across the country in any way they see fit, and grant that $7 million to northern Ontario in order to continue the operation of the railroads in that area. That is about all it is doing. It is really an extremely anaemic gesture. I will reserve any technical discussion on the rates until that committee meets.


Charles Edward Johnston: Mr. Speaker, I think this bill is sufficiently important that everyone in the house should express his views on it. It is a bill which has taken the government a long while to get to this stage. The royal commission have made an extensive study of this problem, and now they have made certain recommendations. I am happy to see that the government is moving along in the direction of putting some of those recommendations into the form of legislation.
I am glad to see that the Minister of Transport (Mr. Chevrier), who has been much concerned with this legislation for some time, is going to make some progress and probably get the bill through the house before he decides to resign his present post for another appointment which I understand is coming. But we should not underestimate the importance of this bill.


Lionel Chevrier: Does my hon. friend want me out?


Charles Edward Johnston: No, not at all. I should like to see the minister get this bill through before he leaves for another appointment or promotion that I understand is coming to him.


Lionel Chevrier: I have never heard of it.


Charles Edward Johnston: You probably will. The
information comes from a very reliable source, so do not be so greatly surprised.


Mr. Deputy Speaker:: Order.


Charles Edward Johnston: I hope the minister does not try to make any final decision on the subject of truck transportation because, knowing his present attitude on that subject, I would not want to discuss it on this occasion. But that is another subject.
This bill is exceedingly important, and one which has been long delayed in coming before this house. Almost everyone who has spoken before me has made reference to the suggestion that this bill is going to equalize freight rates. I cannot see anything whatever in the bill to suggest the equalization of freight rates. I do not think it does any such thing. It will probably endeavour to make the freight rate structure more equitable; but it certainly does not propose to equalize freight rates. In the first place, I do not think that could be done. In the next place, I doubt whether it would be advantageous to all Canada if it were done. I do not think we need to worry about that matter at all. But certainly the present freight rate structure which is embodied in the Railway Act has been most detrimental to the beneficial expansion of Canada, both financially and industrially. That fact was mentioned by our leader, the hon. member for Peace River (Mr. Low), when he was discussing this bill. It was also mentioned by one of the commissioners, Dr. H. F. Angus. He expresses the matter clearly at page 286 of the report when he says:
A rate structure, once established, is an important factor in determining the economic location of industry and any change in an established structure is likely in the long run to affect the location of industry by making some enterprises vulnerable to competition. There are, therefore, vested interests opposed to any substantial change and insistent that, as a matter of national policy, it should be avoided or neutralized.
After careful study, after having carefully heard all the submissions made before that commission, Dr. Angus comes to that conclusion. Is it any wonder, then, that those of us in western Canada and those in the maritimes as well have long complained about the unequal rate structure across this country? But until just lately little heed has been paid to our complaints. Certainly the recommendations of the commission and the report itself tend to substantiate all the claims the western provinces have made throughout these many years.
We in Alberta-and the same is true in Saskatchewan-have all the necessary materials to make a great industrial province. The one thing that has held us back has been the freight rate structure in this country. It is something that is long overdue for an overhaul, and I am glad to see that is coming
Railway Act
at this time. Every time that the railway companies have been permitted to raise their freight rates it has been made that much more difficult for those of us in western Canada to improve our economic, financial or industrial position. There has been a great advantage to Ontario and Quebec, which have these long-established low rates. It is no wonder, Mr. Speaker, that Ontario and Quebec did not appear before the commission to make submissions. It was to their advantage to stay away from the investigation so they might maintain their already favoured position. Dr. Angus makes that very clear when he says:
There are, therefore, vested interests opposed to any substantial change and insistent that, as a matter of national policy, it should be avoided or neutralized.
Therefore it has retarded the progress of Canada as a whole. Some mention has been made of competitive rates, and they are mentioned in the bill as well. There again, let me point out that Quebec and Ontario have been in a very favoured position in regard to competitive rates. Every time there was a rise in freight rates, Ontario and Quebec were affected the least of any province in the Dominion of Canada; and those places which had to bear the brunt of the increase were the western provinces and the maritimes, where there was no effective competition to the railways.
Now we see a great effort made, particularly on the part of the railways, to eliminate all forms of competition in an endeavour to get national transportation, particularly as it applies to trucks, under the control of the federal government. A decision was brought down just the other day by the supreme court, stating that the federal government would have control over interprovincial and international trucking. That principle is not embodied in this legislation, but the effect can be there just the same. It would be a great crime if this House of Commons were ever to allow the railways to get into the position that they did not have effective competition from the trucking industry, because mind you, Mr. Speaker, that is the only effective competition we have in western Canada. In Ontario and Quebec they have competition from water transport, and they also have competition from trucks within their own provinces. The areas over which the trucks have to travel are not as great as they are in western Canada; therefore we in that part of the country are very much concerned that this effective competition shall remain there.
We should not consider the railways as being the poor relatives in this set-up, because

Railway Act
not only have they the great advantages already established under the rate structures but they have other means at their disposal to take advantage of any competition, especially as it applies to the agreed charges which enter into competition. Just this morning I received a circular from the Saskatchewan motor dealers' association. In that circular they point out how effective is the agreed charge clause when it is made to apply to the hauling of freight. I will read a short paragraph from this circular so there will be no chance of misrepresentation. They say:
We understand that the railways have offered the oil companies operating west of Fort William a special "agreed charge" on the condition that they use only rail facilities. According to information we have received the following figures furnish the picture: . . .
Then they give three headings as follows: "present rate per hundred pounds; proposed rail rates per hundred pounds; present Saskatchewan truck rates per hundred pounds." At 20 miles the present rail rate is 22 cents. The proposed rail rate under the agreed charges clause is 5 cents and the present truck rate is 13 cents. If that does not make a very effective form of competitive agreement I would like to know what does. Certainly great caution should be taken in setting up any new freight rate structure to see that no company, no matter whether it be trucks, railways, ships or anything else, has the advantage of such a clause as that to practically rid itself of any effective competition.
One of the good things about this proposed legislation is the $7 million which the railways will receive to maintain the road between Sudbury and Fort William on the Canadian Pacific Railway and a similar distance on the Canadian National Railways. That $7 million should put the railways in a position where they will be able to effectively bring about greater equalization in freight rates, and to that extent we are hoping the new legislation will make it a little bit fairer for western Canada and also for the maritimes.
The maritimes have a very strong case and good grounds for being fearful that this new legislation may affect them detrimentally. I do not think any of us want that to happen. Great care should be taken to see that no part of Canada will suffer unduly because of this legislation. I am sure the committee which is to be set up will deal very effectively with it. I think that can be said generally of any committee which is operating in the House of Commons. I trust that the reference to this committee will be sufficiently extensive to permit it to make a thorough investigation.

I am doubtful whether the time which will be at the disposal of this committee during this comparatively short session will be sufficient to enable it to make the thorough investigation that the subject warrants. I hope the minister will not hesitate to extend the time, which will permit them to do their job, even if they have to sit during the 1952 session. No obstacles should be put in the committee's way to prevent it from making a thorough study of the work which is to be given to it.
There should be a change in the board of transport commissioners. I am not so sure that the general public has been satisfied with the operations of that board. I am not blaming individuals; but as the royal commission has recommended, I think they have not had sufficient technical knowledge to do the work that was assigned to them. Perhaps the board should be enlarged and more technical staff added, so they will be able to go into these questions of rate fixing to a degree which would bring about better results than has been the case in the past. When the committee has completed its investigation of this matter there should be, as a result of that work, a better bill brought forward. I shall not say more at this time, because when we are in committee that will be the time to go into the details of this particular bill and carry on a thorough investigation.


Mr. G. F. Higgins (St. John's East):: Mr. Speaker, I realize that at this stage of the evening, after a subject has been so well debated, it is exceedingly difficult to say anything that has not been said before. This subject, however, is of such great importance to the maritime provinces and Newfoundland that I think anything, even though it may be repetitious, may be fairly said.
As the minister said after introducing the measure, it is based on the recommendations of the royal commission on transportation. So far as I have read the bill, that part of greatest importance to the maritimes, and certainly to Newfoundland is section 332A dealing with equalization. When introducing the subject on April 5, as reported at page 1656 of Hansard, the minister said, referring to the report:
In the chapter entitled "Equalization" the commission is of the opinion that the time has arrived when there should be equalization of freight rates in Canada so far as that is possible. To say in a report that there should be equalization is one thing, and to put it into effect is another.
That, I think, is the gist of the whole difficulty with which hon. members find themselves faced today. In discussing the resolution the other evening, and again in introducing the measure today, I believe the minister endeavoured to lay at rest some of the worries

of maritime members with respect to increases in their freight rate structure. On Tuesday-night, when he was asked on one or two occasions as to the increases to be faced in freight rates, especially by Newfoundland, he said quite definitely that this legislation had nothing whatsoever to do with increases in freight rates. After reading his remarks and studying the legislation I must agree with him in so far as the measure itself is concerned. But, Mr. Speaker, at this point we diverge. Here I join with members of my party who have spoken this afternoon, and who have disagreed with the minister and with the senior member for Halifax (Mr. Dickey) in the interpretation they have placed upon the bill.
As the senior member for Halifax said, if you can read the king's English you must understand you are fully protected by the Maritime Freight Rates Act. I may not have quoted his words exactly, but that is what I understood him to say. That may be so, and the minister may be perfectly correct in what he says. But again I say that is a legal interpretation. While I have a high opinion of the minister's legal ability, with all due respect to him I would want a little more than an opinion. If we had a definite and positive undertaking by the government that there will be no increases in freight rates so far as our province is concerned, then I would have no further hesitation in taking my seat at this moment. But I know we cannot get that. With all due respect to what was said by the minister as to certain applications being sub judice-and he was referring to applications now pending before the board of transport commissioners-I say that such applications are based upon this measure. In my opinion any reference to them-and again I bow to the ruling that has been given-is not out of order in this discussion. It is the interpretation to be put upon this measure as to which the board of transport commissioners are now being asked by the railways to rule.
Equalization as we understand it, and as it has been explained to us, means merely that the western provinces, which have agreed to this theory of equalization and which have been complaining bitterly for years about high freight rates, will have their freight rates scaled down, while maritime rates will be increased. That is what equalization is going to mean. We had not long been a part of this dominion before we were faced with a freight rate dispute of another type. This involved an increase in freight rates for Newfoundland. At that time I made the brash statement that I would resign from this august company if we were not given justice. I was happy to 94699-30
Railway Act
note that my threat was taken into consideration and that I did not have to resign; because I can assure hon. members that I am not going to repeat the threat. I was young in the membership of the house in those days. However, there is another chamber in parliament, a chamber used to mild speeches, a chamber used to conducting itself in a more orderly manner; and I hope I am not using an improper word. Recently over there we heard very strong statements made by a Newfoundland Liberal senator.


Mr. Speaker:: Order. I would remind the hon. member that it is not customary to refer to recent debates in the Senate.


Gordon Francis Higgins: I do not wish to infringe upon the rules, but .what was said was in reference to this particular matter. I would suggest to hon. members that they peruse the official report of debates in that place, so they might see what I mean.
In that connection I have a comment which I believe would be in order, which arises out of an editorial in the Daily News of St. John's. It makes reference to the speech made in the other chamber, but I shall not refer to that part. Perhaps I might say in passing, however, without pursuing the matter further, that the observations were made by a person who was not altogether unfavourable to the government. This is what appeared in the Daily News of October 22:
People are just beginning to wake up to what equalization could mean to the future of Newfoundland. As a consequence they are alarmed at the damage that could be done to their economic hopes and shocked that in a federal system this kind of proposal could be made.
Newfoundland did not join Canada so that her people could become hewers of wood and drawers of water.
Premier Smallwood has himself disclaimed as the objectives of first importance some of the chief props of the confederate campaign. It was not for old age pensions, not for family allowances, he has said, good as these are that he sought to bring Newfoundland into the Canadian federation. It was rather to gain that wider market and consequent economic emancipation from dependence on one or two primary industries that he fought so hard.
But equalization threatens to blast at a single blow every hope and prospect he may have of building a small industrial empire in Newfoundland. It would cripple existing industries, drive up the cost of living to intolerable levels, and destroy all that has been attempted to procure a diversified economy through a new kind of industrial development.
For if federation means anything at all, it means equal opportunity for all. If, on the other hand, It can be construed as a system that imposes a penalty upon the people of provinces that are industrially poor and far from the main centres of production and distribution, then it is nothing more than a sham, a deception, and a mockery.
And again:
The major benefit of union, in Mr. Smallwood's
own terms, is 1he wider market we should be able

Railway Act
to enjoy for the products of this province. Equalization would destroy that market. It would also crush the local manufacturing industries we already have. And. in fact, if we do not get the benefit of that wider market, confederation will prove no more than a snare and a delusion.
We are at this very time contributing not less than $50 million a year in direct and indirect taxation to Ottawa, and that is more than we get back in baby bonuses and pensions and unemployment insurance and federal disbursements on public works and other administrative outlays. That revenue, accruing to Newfoundland as a sovereign entity, would be capable of meeting all the services we now receive from all sources. We are not, therefore, a parasitical growth attached to the Canadian federation but a people who are paying their way and paying it in full.
The least that we can expect is that Canada should prove herself to be the kind of federation that has been her boast for the past seventy-five years.
We want freight rates that represent an acknowledgment of the fact that we are not to be penalized for our geographical remoteness from the centre of Canadian industrial life.
And further on:
We want equality of opportunity with the rest of Canada so we can pull our full weight in the dominion and work out a bright and prosperous economic future within the framework of confederation.
We want this equality of opportunity in many fields, not the least of them education.
But above all and everything else, we demand the right to live by our industry and not to be placed in the position where the only salvation for our people is that they should move to where freight rates have decided they must go.
We did not enter union that Newfoundland might become a deserted and penurious island. We did enter it so that Newfoundland might attain to a new economic and social stature. But if the equalization bill goes through by the will of the Liberal majority in the parliament at Ottawa that purpose will be destroyed and Newfoundland will be destroyed with it.
Those are strong words, and comments equally strong have been made in another place. I do not know that there is much I can add to that type of argument. Rates have been referred to by the hon. member for Annapolis-Kings (Mr. Nowlan), which would suggest a considerable increase indeed. If the minister has no objection I should like to refer to some additional rates because they show more glaring increases. They make it quite obvious why the people of Newfoundland are so worried.
For class 1 freight the present rate from Toronto to St. John's-*


Lionel Chevrier: May I ask the hon. member if he does not think that the rates he intends to place on Hansard should be given to the committee instead? I understand those rates were submitted to the board of transport commissioners in connection with its equalization investigation, and the matter is therefore before the courts.


Gordon Francis Higgins: If we give second reading to this bill we will be approving it in principle,

and it would then be more difficult to have this particular section removed. I hope I am wrong in that understanding. That is why I should like at this time to present every possible argument that can be put forth, at least by those from the maritimes, to show that this equalization principle is not of benefit to us.


Lionel Chevrier: I believe the hon. member should give that to the committee. I think that is the proper place.


Howard Charles Green: If the minister is raising a point of order, let him raise it. If he is not, he should allow the hon. member to go on with his speech.


Lionel Chevrier: I do raise a point of order. The hon. member is quoting rates which have been submitted to the board of transport commissioners in connection with the equalization investigation following order 1487 passed by the government. The matter is now under investigation, as the hearing was adjourned until January 10, 1952. Therefore anything having to do with it is sub judice and should not be referred to in the house.


Howard Charles Green: The order in council directing the board of transport commissioners to make this investigation was passed nearly three years ago, and they have been on that investigation ever since. Here we have a case where certain railways have put forward proposals in connection with the equalization plan. The details of this plan have been published in the press. I submit that the minister is completely wrong when he says that this matter cannot be discussed. I repeat that these figures have been given in the daily papers. There is nothing before the courts in the accepted meaning of that term, and I submit that the hon. member for St. John's East is perfectly in order in attempting to bring forward the effects of these high rates.


Lionel Chevrier: May I say a word in reply? The point is that this legislation has nothing to do with individual rates filed before the board of transport commissioners. This legislation proposes to enact certain principles which the board of transport commissioners will be directed to put into effect. The hon. member for St. John's East is attempting to put on the record matters that are before another court of record. Being a lawyer, surely he will not insist on that.


Stanley Howard Knowles: Being a lawyer, he will try anything.


Lionel Chevrier: I pointed this out as respectfully as I coul i to the hon. member for Annapolis-Kings, who immediately desisted. The

hon. member for Annapolis-Kings did not place on the record what the hon. member for St. John's East now proposes to place on the record, and I do not think that should be done.


Howard Charles Green: The hon. member for Annapolis-Kings had already put figures on the record before the minister made his protest.


Lionel Chevrier: He put one figure on the record out of a series of figures.


William Joseph Browne: He put six
figures on the record.


Howard Charles Green: This bill lays down a policy-


William Joseph Browne: Mr. Speaker-


Lionel Chevrier: The hon. member should not be heard.


William Joseph Browne: On a
question of privilege, the minister has just said that the hon. member for Annapolis-Kings put only one figure on the record.
I took down six figures that he put on the record, and when I interjected that he had placed six figures on the record the minister, in a manner different from his usual behaviour, made a remark which I consider he should not have made.


Lionel Chevrier: Perhaps in making the
remark I did I was governed by the conduct of the hon. gentleman the other evening, but, in order that he may feel quite sure I have no intention of disparaging him or any other hon. member, let me tell him now that I did not mean to hurt his feelings or reflect on his integrity in any way by the statement I made a moment ago. I hope he will accept that explanation.


Howard Charles Green: If I may continue with the point of order-


Mr. Speaker:: I just wonder how serious this matter is. Citation 246 (c) in Beauchesne, third edition, reads:
246. Besides the prohibitions contained in standing order 41, it has been sanctioned by usage both in England and in Canada, that a member, while speaking, must not: . . .
(c) refer to any matter on which a judicial decision is pending.
I understand that these figures have been published in the press. I am wondering if their appearance in Hansard would be apt to have any effect upon a pending judicial decision. Most of them have already been put in this afternoon. Would there be much objection to allowing the figures to go in?


Some hon. Members:: Agreed.


Mr. Speaker:: I am not making a formal ruling on it, but the circumstances are that 94699-30 a
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the figures have appeared in the press and have been widely publicized, and some of them are already on Hansard.


Lionel Chevrier: I am not going to object. The only thing is, I was hopeful that an interminable list would not be put on the record because the plan that was submitted is very lengthy. There are hundreds of thousands of freight rates, and my hon. friend might be tempted to put a substantial list on Hansard. It was for that reason I interrupted.


Gordon Francis Higgins: I guarantee not to put on 100,000. I will put on five so we may be clear about the matter.


Mr. Langlois (Gaspe):: Five thousand.


Gordon Francis Higgins: Just five. I should like to refer to the conclusions and recommendations of the royal commission on pages 125 and 126 of their report. No. 8 is as follows:
The board has requested the railways to submit to them the railways' proposals for equalization of freight rates throughout Canada subject to statutory prohibitions . . .
And so on. I think, Mr. Speaker, that has been done. That is why I think these figures are admissible, but we will not argue.
I have only five examples, and I will put them on Hansard. As I said a short time ago, the present rate from Toronto to St. John's on class 1 freight, which is drygoods, motorcars, etc., is $3.12. The proposed rate is $6.32, an increase of $3.20 or 102-6 per cent. On class 3 freight the present rate is $2.39 and the proposed rate is $4.52, an increase of $2.13 or 89.1 per cent. Class 3 includes chiefly canned goods. On class 5 the present rate is $1.57 and the proposed rate is $2.84, an increase of $1.27 or 80.9 per cent. That class is chiefly carload lots of various types. On class 8 the present rate is $1.14 and the proposed rate is $1.89, an increase of 75 cents or 66 per cent. That class is special bulk movements of freight. On class 10 the present rate is $1.04 and the proposed rate is $1.70, an increase of 66 cents or 63.5 per cent. That class is also bulk shipments.
I think these figures speak more strongly than any argument any hon. member from the maritimes in all his wisdom could possibly adduce. It is going to mean a definite increase in the cost of living for the people of Newfoundland and the maritimes. It is against that most iniquitous system of equalization that I am protesting in the strongest way I can. We can say what we like about the railways, but my own idea is that they should be regarded in the same category as public works, wharves and so on. They should, if necessary, be subsidized so that people in certain parts of Canada may live on a fair basis with the people in the better off

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provinces. As it is six o'clock, Mr. Speaker, I will let the matter stand at that point.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
Mr. H. R. Argue (Assiniboia):: I believe, Mr. Speaker, the main feature of the bill we are now discussing is the fact that it does recognize the principle of equalization. It does suggest that at least a target of equalization is being set. The royal commission on transportation recommended that there should be a strengthening of the board of transport commissioners. I see that the bill makes certain changes in the possible term of office, pension and some other matters in reference to the board. However, there has been no change in one particular part of the Railway Act where I believe a change should have been made, and that is the provision that the chief commissioner must have been a judge of the superior court of Canada or of any province of Canada, or must have been a barrister or advocate of at least ten years standing at the bar of any province.
I have no quarrel at all with the legal profession. I suppose if I were, in some manner or other, to get into trouble I might have to seek the advice of a member of that profession. They have their place, but I cannot see why it is a necessary qualification for a chief commissioner that he be a lawyer. If one were to look across Canada in an effort to pick out a group of men who are best qualified to deal with the matter of freight rates, who have the greatest knowledge of railway problems and the efEect of freight rates on the various parts of our economy, I believe one would be forced to pick the majority of that group from our universities, from men trained in the field of economics. I would think that the best freight rate specialist would be a man who had majored in economics, with special training in railway affairs and freight rates. I, for one, cannot see why the chief commissioner or the deputy chief commissioner must be a member of the legal profession. When it comes to selecting the personnel of the board of transport commissioners I feel the government should endeavour to get the best possible candidates for the job, whether they be lawyers, the members of some other profession or merely laymen with outstanding ability.
One of the members of the board of transport commissioners who has recently

resigned, Mr. W. J. Patterson, who was premier of the province of Saskatchewan for nine years, was not a lawyer. As a matter of fact I believe he did not have a university degree of any kind. He was an able man, however, with sufficient ability to lead a political party in a province and to be premier of that province for a period of nine years. Yet when he became a member of the board of transport commissioners he knew there was no promotion within that board for him. Whether or not he was the best man on the board, there was no hope of advancement for him simply because he was not a lawyer. I say, therefore, that this particular section should be changed. I do not say that judges or lawyers should not be members of the board. If they are the best men the government can obtain, well and good. But other able people should not be barred from becoming chief commissioner or deputy chief commissioner merely because they do not happen to be members of the legal profession.
The main part of this bill is contained in section 332A which states:
It is hereby declared to be the national freight rates policy that, subject to the exceptions specified in subsection four, every railway company shall, so far as is reasonably possible, in respect of all freight traffic of the same description, and carried on or upon the like kind of cars or conveyances, passing over all lines or routes of the company in Canada, charge tolls to all persons at the same rate, whether by weight, mileage or otherwise.
Then it goes on to say that the board of transport commissioners may, with a view to implementing the national freight rates policy, require any railway company to establish a uniform scale of mileage class rates applicable on its system in Canada; and,
(b)	to establish for each article or group of articles for which mileage commodity rates are specified, a uniform scale of mileage commodity rates applicable on its system in Canada . . .
In other words, that is the target. This bill provides that the railways shall, "so far as is reasonably possible", establish equalized freight rates. The board of transport commissioners may-apparently it is at their discretion-with a view to implementing this policy require the railway companies to establish uniform scales of mileage -class rates and mileage commodity rates. In my opinion, Mr. Speaker, that is no more than a well spelled out target. It does not mean necessarily that within six months or twelve months there will in fact be an equalized freight rate structure throughout the country. In fact, for a long period of time it has been the government's stated -policy that freight rates should be equalized in so far as possible. The order in council passed on April 7, 1948,

instructing the board of transport commissioners to conduct a general inquiry asked them to do that, and I quote from the order in council:
. . . with a view to the establishment of a fair and reasonable rates structure which will, under substantially similar circumstances and conditions, be equal in its application to all persons and localities . . .
In other words, the well spelled out target of equalized freight rates, as provided in this bill, is very little if any more specific than the target of equalized freight rates spelled out in the order in council of April 7, 1948. Therefore if there is to be in fact an equalization of freight rates the board of transport commissioners must, on their own initiative, see that such a policy is undertaken and accomplished. I believe the minister should inform the house as to how long he expects it will take the board of transport commissioners to establish this government policy that is outlined in the bill. The people of Canada should know whether they can expect to wait another six months for equalized freight rates, or another twelve months, or if in fact there is going to be any target date, or any particular date by which they may expect that this legislation will be implemented.
The minister has said that this legislation implements the recommendations of the royal commission. I think that statement is only partially correct. This legislation may implement the recommendations of the royal commission on transportation if, as a result of this legislation, we in fact obtain an equalization of freight rates. The very fact that this legislation is being passed, based as it is on the recommendations in the report of the royal commission, does not in itself guarantee that we shall obtain equalized freight rates in Canada, as was the hope of the royal commission. I therefore stress again that time is of the essence. The people of western Canada have now waited for many years in the hope of getting equalized freight rates. This legislation may bring about an equalization of freight rates if, in fact, the government sees to it that such an equalization is brought about. It is one thing for the government to ask parliament to approve this legislation, and it will be another thing for the government to see that it is made effective.
We on the prairies feel that we have every right to ask and expect from the government whatever steps are necessary to establish the equalization of freight rates. The building of the transcontinental railroad across a wide barren waste, as it was at that time, was part of our national policy. As a result of
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that national policy our freight has travelled east and west whereas, from the standpoint of the prairies, it might well have travelled to a greater extent north and south. The national policy has, in fact, placed extra burdens on the people of Canada. When one considers what should be done in order to correct the disadvantages that have come about as a result of freight rate policies in the past, one must consider the results oi other national policies in other fields. The tariff policy has siphoned off industries from the maritimes to central Canada, as the hon. member for Cape Breton South (Mr. Gillis) has often pointed out. The tariff system has made it almost impossible for any significant industry to be built up on the prairies. The tariff policy has aided the industrialization of central Canada.
The national policy now is for the construction of the St. Lawrence seaway. The St. Lawrence seaway will no doubt result in lower transportation charges in this area. It may force the railway companies further to lower existing competitive rates. I do not complain of the national policy in the past or of the national policy today in building the St. Lawrence seaway. But I say that if government policy results in so much greater advantage for the provinces of Ontario and Quebec in respect of tariffs, the St. Lawrence seaway and other matters, then I think it is all the more necessary that steps should be taken to lift the burden of freight rates from the people on the prairies, in the province of British Columbia and in the maritimes.
In this bill the government has announced that, in order to implement further the suggestions of the royal commission, a $7 million subsidy will be paid for the maintenance of the bridge between east and west. In my opinion that $7 million subsidy might result in great advantage to the people on the prairies; but I have yet to hear from the minister what formula will be used to pay out that $7 million. What assurance can the minister give to parliament that the $7 million will, in fact, result in a lowering of the freight rates for .people living in western Canada, shipping out goods from the west and receiving goods from the east? The $7 million could well merely result in further income for the railway companies. Something will have to be done if the $7 million is in fact to be passed on to the people of western Canada in the way of lifting the burden of freight rates.
I for one am not opposed to subsidies. I am not afraid of the government spending too much on subsidies. I think there is a

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definite place in national policy lor subsidies in order to relieve, in this instance, the burden of freights. I hope this legislation will in fact result in an equalization of freight rates. However, even though we pass this legislation, and even though the government may overhaul and strengthen the board of transport commissioners, I am not at all sure that we still may not have an inequitable freight rate structure. It may well be that competitive rates in Ontario and Quebec are so important and so far-reaching that even though other rates may be equalized, in fact the freight rate burden will still be relatively heavy on people outside those provinces. For that reason I believe there is great merit in the suggestion advanced by the province of Saskatchewan in its brief to the royal commission, wherein it suggests that whatever subsidies may be necessary should be used in order to establish, for all practical purposes, an equal freight rate structure for the people on the prairies as compared with persons living in Ontario and Quebec.
The Saskatchewan brief went even further. It said that in order partially to compensate the people of Saskatchewan, Alberta and Manitoba for the results of tariff and other policies which meant the industrialization of Ontario and Quebec, there should be a further subsidy to roll back freight rates as applied to the prairie area. Saskatchewan asks for a prairie freight rates act similar to the Maritime Freight Rates Act. I believe the $7 million might better have been used as a partial payment toward the establishment of fair rates through a prairie freight rates act. If the $7 million itself were applied to the rates prevailing for western Canada we would be assured that this amount of money would in fact result in a lesser freight rate burden for the people on the prairies. But because the $7 million will be paid to the railways, and because the minister has not yet informed parliament what steps will be taken to guarantee that the subsidy does in fact result in lower freight rates on the prairies, we cannot be certain that when the people of Canada pay that $7 million we shall obtain a reduction in freight rates equivalent to that amount. Therefore I say there is great merit in the submission of the province of Saskatchewan, asking for subsidies on freight rates prevailing in western Canada in order partially to compensate us for other disadvantages resulting from other national policies.
I believe the minister should assure the house on one further thing, namely that there will not be another horizontal increase in freight rates before this legislation has been made effective. On June 12, during last

session, we in this group endeavoured to ward off the last horizontal increase in freight rates. On that day I proposed the following motion, seconded by the hon. member for Melfort (Mr. Wright), as reported at page 3972 of Hansard:
". . . in the opinion of this house no further increases in freight rates should become effective prior to consideration by parliament of the government's proposed legislation arising out of the report of the royal commission on transportation."
The Speaker did not feel the resolution was in order at that time and consequently ruled it out of order; but it does make clear that the members of this group, before the last increase in freight rates had been made, indicated to the government that it was our wish that there be no further horizontal increase in freight rates until the new legislation had been introduced in parliament. So once again I ask the minister whether he can assure the house and the country that there will be no further horizontal increases in freight rates until the steps forecast in this legislation have been undertaken and fulfilled.
The very fact that a horizontal increase in freight rates was allowed on July 4 makes the problem of equalizing freight rates now even more difficult. The fact that following that increase in freight rates there was no similar increase in competitive rates in the eastern area makes the disparity between freight rates in central Canada and the prairies even worse. Instead of obtaining freight rates more nearly equal after the royal commission report had been tabled and we had learned its important recommendations, we found that the board of transport commissioners once again allowed a further increase in freight rates resulting in a further disparity between the rates existing in eastern and western Canada.
I might quote part of an editorial appearing in the Regina Leader-Post on July 6. That paper has always been a staunch supporter of this government. It reads in part as follows:
Although interim in effect, the transport board's award oi a 12 per cent across-the-board increase will simply accentuate existing inequities and render any subsequent adjustment of the structure that much more difficult. The added burden as far as the west and the maritime provinces are concerned will be even greater in view of the railways stated intention of not applying the increase to competitive rates prevailing in the central provinces.
The article then goes on to suggest that the thing for the government to do was to set aside that 12 per cent increase. Well, if it were true that there should not have been a horizontal increase in July, it is even more true today. When this legislation has at last been introduced into parliament then there

should be no further horizontal increase in freight rates until it has been made effective.
To sum up, Mr. Speaker, I suggest that the qualification for members of the board of transport commissioners should not in anyway be limited to membership in the legal profession. The government should endeavour to get the best men possible. If they are members of the legal profession, well and good. If they are not members of the legal profession they should not be barred for that reason. I further suggest that there should be a time limit, some assurance from the minister that within a specified time this legislation will in fact be made effective. Further I believe, as does the Saskatchewan government, that there should be a compensatory payment to the railways in order that freight rates may be lowered to western Canada, partially to compensate for the effects of other national policies on the people within that area. And finally the minister should assure the house that until this legislation does in fact become effective, until there is an equalization of freight rates, there will be no further horizontal increases in present rates.


William Joseph Browne: Mr. Speaker, as a representative from Newfoundland I feel that I should have something to say on this important subject. I do so with a certain amount of diffidence because the matter is technical, and I think any hon. member who has studied it will find that it is complicated as well.
There is a certain amount of mystery about the origin of this legislation. On reading the report of the royal commission on transportation I find certain contradictory statements on page 124 that logically would justify the government in ignoring the recommendations of the royal commission and not proceeding with this equalization bill at the present time at all. In giving the history of the subject of equalization the report says:
In 1925 by P.C. 886 the governor in council directed a general freight rate investigation and stated that "The policy of equalization of freight rates should be recognized to the fullest possible extent as being the only means of dealing equitably with all parts of Canada."
That was in 1925.
The matter was discussed in a recent judgment of the board of transport commissioners in the 21 per cent case, and the board pointed out that there are instances where rates in the west are lower than in the east and in other cases the reverse is true, but they said: "The general rate level as a whole in Ontario-Quebec is below that in the prairies." The board, however, justified this on the grounds set out above.
It has been demonstrated that over the years there has been a gradual improvement in the situation and the railways argue that now, taking into
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account the Crowsnest rates on grain there is little or no difference in the general over-all level of rates between the west and the east.
Nevertheless the fact remains that the alleged inequalities in rates have been a subject of contention for many years and in April, 1948-
And that was before the judgment in the 21 per cent case.
-the governor in council by P.C. 1487 directed the board to conduct a freight rate investigation "with a view to the establishment of a fair and reasonable rates structure, which will, under substantially similar circumstances and conditions, be equal in its application to all persons and localities . . ."
The report puts in P.C. 1487, after the judgment in the 21 per cent case. To my mind that judgment in the 21 per cent case should have disposed of the question and made it unnecessary for the government to proceed with this sort of legislation.
Then the report goes on to set out the arguments of the provinces, showing that the western provinces of British Columbia, Alberta, Saskatchewan and Manitoba wanted equalization but did not believe that it was feasible, and that the maritime provinces did not subscribe to or support the so-called equalization of freight rates. So the provinces, if one includes Newfoundland as having come in, were equally divided on the subject- four in the west and four in the east. As the hon. member for Annapolis-Kings (Mr. Now-lan) pointed out, where is the justification for the conclusion and recommendation in the first paragraph on page 125, which states:
It would appear, from the foregoing and having regard particularly to the terms of order in council No. P.C. 1487, that the broad general principle of equalization throughout the country is now accepted.
Logically I cannot see how they can come to such a conclusion. It continues:
It must be noted, however, that the order in council provides that this equalization shall be subject to such special statutory provisions as affect freight rates.
It seems to me there should be some clarification by the minister as to why the government is proceeding with this legislation, and what it is going to mean. It is strange that, although the provinces seem equally divided, it should be gone ahead with at this time. At page 126 the royal commission shows how far it intends to go, when in paragraph 9 it says:
Consideration of the various complaints and suggestions referred to in the immediately preceding chapter and the recommendations made with respect thereto indicate that substantial progress towards the goal of equalization may be accomplished by the following means:
(a)	The abolition of the present standard maximum mileage tariffs;
(b)	The establishment of one uniform equalized class rate-

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In my opinion this is revolutionary when taken in conjunction with the new section 332A which says:
(1) It is hereby declared to be the national freight rates policy that, subject to the exceptions specified in subsection four, every railway company shall, so far as is reasonably possible, in respect of all freight traffic of the same description, and carried on or upon the like kind of cars or conveyances, passing over all lines or routes of the company in Canada, charge tolls to all persons at the same rate, whether by weight, mileage or otherwise.
The royal commission recommended and the government is proceeding with the repeal of sections 328 to 332 which set out the manner in which freight rates could be charged. They propose to substitute a new scale of rates or a new method of rates. As the hon. member for Annapolis-Kings and my colleague from St. John's East (Mr. Higgins) pointed out, the railways have been asked to put forward to the board a scale of rates, and they have done so. It is this scale of rates that has caused consternation in the maritime provinces, especially in Newfoundland.
It seems to me reasonable to ask the minister what the effect of this legislation would be if it were enacted at the present time, if it did not have to go before the committee, and if there were no change in it. What would its effect be? Or supposing it should go before the committee and receive endorsation immediately; what effect would it have? I submit it would be possible for the new freight rate structure as put forward by the railways to be accepted by the board and put into effect, and that it would have the results that have caused such anxiety in the east, especially in Newfoundland.
I am sure the government must have given some consideration to these recommendations. The Secretary of State (Mr. Bradley) must have delved deeply into the effect this would have upon his native land. He must have pointed out to the government that it was going to be serious. We are informed that it would be serious and, as I propose to show in a moment, the Maritime Freight Rates Act gives little or no relief. In one instance it gives no relief at all.
Is the minister able to say whether this equalization policy, if adopted, will have the effect in the west of levelling rates up or bringing them down? Or will it bring the rates up or down in the maritimes? This legislation is not wanted in the maritime provinces. The remedies they suggested are found in the report of the royal commission at page 29. No mention is made there of the principle of equalization. They wanted instead-
(a)	Restoration of the arbitrary over Montreal that existed on July 1, 1927;
(b)	Limitations on horizontal increases;
{Mr. Browne (St. John's West).]
(c)	New Brunswick in particular requests that the reduction under the Maritime Freight Rates Act be made to apply to inbound as well as outbound freight and that the 20 per cent reduction accorded by the act be increased to 30 per cent;
(d)	Prince Edward Island asks that the reduction apply to inbound freight on certain articles entering into costs of production in that province; and
(e)	An extension of the reduction granted under the Maritime Freight Rates Act beyond Levis to points as far west as Toronto or Windsor, Ontario.
It is reasonable to agree that the managers of the railways want to make them as profitable as possible. Certainly the shareholders of the Canadian Pacific Railway, the privately owned concern, would feel much better pleased to see their company making a lot of money than to see it going into the red. And the duty of the management of the Canadian National Railways is to manage the railways efficiently and fairly for all the people in Canada.
Nevertheless it has been recognized by the royal commission and by previous royal commissions-by anyone who has studied the subject-that there are certain geographic,, economic and historical considerations that cannot be ignored by anyone, certainly not by this government. The hon. member for Annapolis-Kings (Mr. Nowlan) pointed out that the Intercolonial railway had been built over the most expensive route for strategic reasons. Is it fair that those who buy in central Canada and have their goods transported over that line or who send goods from the east to the west over that line should be charged on a mileage basis when the route is 250 miles longer than it should be?
Economic conditions in Newfoundland are-similar to those that exist in the maritimes and there was complete justification for the immediate application of the Maritime Freight Rates Act. We have the same primary industries of fishing, mining, lumbering and papermaking and the number of secondary industries is quite small. The same type of intelligent men that will be found in Toronto or Montreal have been struggling against great handicaps for many years to build up industry and make the country self-supporting. In Newfoundland we have a railroad 547 miles long which runs uphill, downhill, over steep grades and around sharp curves and takes 26 hours to go from St. John's to Port aux Basques along a narrow-gauge track. I do not think the house will think it unfair if the people of Newfoundland ask for some consideration, when the actual distance between St. John's and Port aux Basques is only 315 miles. They should not have to pay on a mileage basis because that road was constructed in a great semicircle around the island in order to touch at as many settlements as possible.

We feel that the economic and geographic considerations that warranted the Maritime Freight Rates Act are to be found in our province. However, following the pattern set out in the report of the royal commission the minister has told us that freight rates are to be treated on a national rather than a regional basis. I apologize if I have not expressed his thoughts in as fine language as the minister would use, but I found it hard to follow him as he read his statement this afternoon. As I understand it, the recommendation of the royal commission is that in future freight rates should be treated on a national basis and as far as possible the regional idea should be eliminated. That is impossible. I do not believe the government will be able to answer the complaints and objections that will be made to the committee in regard to the application of the principle of equalization to the maritime provinces and Newfoundland.
It is generally believed in Newfoundland that the new scale of freight rates put forward by the railroads to the board of transport commissioners is likely to come into effect. This has caused a great deal of anxiety among members of boards of trade and industry generally in Newfoundland. These people have organized themselves to fight and if possible have this principle dropped. The hon. member for St. John's East (Mr. Higgins) quoted from the Daily News of October 22, and I should like to quote an editorial which appeared in the Daily News of October 18. I hope the minister will not feel offended at the strong language that is used; I think it indicates the feeling that prevails in Newfoundland. The editorial is headed "Iniquitous Proposals" and reads:
The so-called freight equalization measure, now before parliament, seems to have made all too little impression on the public mind. That is unfortunate because its provisions will affect the living of every citizen of Newfoundland. Its effect will be to double or nearly double all existing freight rates between St. John's and the main distributing centres of the mainland.
And again:
Under the equalization system class 1 commodities would show a freight rise of from $2.60 to $4.86 per 100 pounds on the relatively short journey from Montreal to St. John's. Other commodities would show sensational rises of from 80 to 100 per cent above prevailing rates.
And further down:
The long and the short of It is that the equalization bill is an iniquitous measure which might very easily spell the economic ruin of this province and make a mockery of the whole institution known as confederation. It would wipe out at a single blow every advantage gained by the maritime provinces as compensation for the weakness in the Canadian federal system of their economic geographical position. It would concentrate wealth in the centre and underwrite poverty in the maritimes.
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And then it concludes:
The government of this province has a big stake in the fight against equalization. It has the stake of its own industrial development policy. For if new industries have to pay exorbitant freight rates to get their goods to market or have to pay those same exorbitant rates not only to send their finished products to consuming centres but also to bring in some of their raw materials, they haven't a ghost of a chance to succeed unless the government sets up its own system of subsidized transportation between Newfoundland and the mainland. That is a prospect that nobody wants to contemplate but which may have to get serious consideration if equalization cannot be stopped.
It appeared to me this afternoon that the hon. member for Halifax (Mr. Dickey) did not appreciate the effect this legislation may have upon freight rates to the maritimes from central Canada and from the maritimes to central Canada. The hon. member referred to their being unanimity in the house, in favour of this bill, but I am sure the minister must realize that there is no evidence of such unanimity on the part of speakers on this side of the house representing the maritimes. Such unanimity does not exist. The hon. member for Halifax referred to subsection 4 of the bill which reads:
(4) Subsections one, two and three are subject to the proviso to subsection five of section three hundred and twenty-five of this act and to the Maritime Freight Rates Act, and do not apply in respect of
(a)	joint international rates between points in Canada and points in the United States of America;
(b)	rates on export and import traffic through Canadian ports, where in practice such rates bear a fixed and long-standing relationship with rates on similar traffic through ports in the United States of America:
(c)	competitive rates;
(d)	agreed charges authorized by the board under part V of the Transport Act, 1938;
(e)	rates over the White pass and Yukon route; and
(f)	any other case where the board considers that an exception should be made from the operation of this section.
I have here the Maritime Freight Rates Act. It has been pointed out to us by the maritime transportation commission, to which Newfoundland adheres and which is the source of the figures quoted by the hon. member for Annapolis-Kings, that there will be an increase of from 63 per cent to over 100 per cent if the rates proposed by the railways are accepted. It is the contention of the hon. member for Halifax, and I believe it is the belief of the minister, that the Maritime Freight Rates Act will protect the maritimes and Newfoundland from the application of any such rates. The minister has not said so and I do not think he was sure of it himself, although he did say that there will be no 100 per cent increase.
The hon. member for Halifax said it was fantastic to think of a 100 per cent increase.

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Certainly it is fantastic, but that does not mean to say that the government will not do something fantastic. One never knows what the government might do. If they do this they will certainly be doing something that is fantastic. Section 3 of the Maritime Freight Hates Act reads as follows:
All persons or companies controlling, or concerned in the preparation and issue of tariffs of tolls to be charged in respect of the movements of freight traffic, whether on behalf of His Majesty or otherwise, upon or over the eastern lines specified in section 4 of this act, and hereinafter called "preferred movements," are hereby authorized and directed upon and after the first day of July, one thousand nine hundred and twenty-seven, to
(a)	cancel all existing freight tariffs in respect of such preferred movements;
(b)	substitute other tariffs for the tariffs so cancelled showing a reduction in such tariffs of approximately 20 per cent.
That arises out of the famous Duncan report. The tariffs that were in existence in 1927 had to be abolished and new tariffs cutting them by 20 per cent had to be substituted. Those tariffs are not in effect today. They have been increased by several freight increases. What is to prevent their being increased again?


John Horace Dickey: Read the act.


William Joseph Browne: I have been reading it for the last couple of days.


John Horace Dickey: Read it for another couple
of days.


William Joseph Browne: I do not
think the hon. member for Halifax can have read it. You will notice that section 3 refers to preferred movements. Preferred movements are described in section 4 of the act, which reads:
The following are preferred movements as referred to in section 3 and other sections of this
(a)	Local traffic, all rail-Between points on the eastern lines; for example, Sydney to Newcastle;
(b)	Traffic moving outward-
That is traffic moving out of the maritimes, westward. That is what is meant by that. It continues:
-westbound, all rail-From points on the eastern lines westbound to points in Canada beyond the limit of the eastern lines at Diamond Junction or Levis; for example, Moncton to Montreal-the 20 per cent reduction shall be based upon the eastern lines proportion of the through rate or in this example upon the rate applicable from Moncton west as far as Diamond Junction or Levis;
(c)	traffic moving outward, export traffic, rail and sea . . .
That is traffic that goes right through to Liverpool. The next section of the Maritime Freight Rates Act states that the 20 per cent reduction does not apply to traffic moving inward or outward from the United States, all rail, or to traffic moving inward east-bound from Canada, in other words from

points in Canada not on the eastern lines eastbound to points on the eastern lines. For example, from Toronto to Moncton or from Toronto to Saint John, or from any place west of Diamond Junction or Levis going east the 20 per cent reduction does not apply at all. Therefore you will see that if there is any increase in freight rates it will apply to the traffic moving to the maritimes and Newfoundland, and the most the maritimes can expect by way of relief is 20 per cent of the newly increased rate on the traffic westward.
Therefore there is nothing in the legislation or in the Maritime Freight Rates Act to give any reassurance to the people of the maritimes and Newfoundland that they are not likely to have serious freight rate increases imposed upon them. It seems to me the minister should give some assurance on this matter. If the reasoning that has been put forward by the hon. member for St. John's East (Mr. Higgins), the hon. member for Annapolis-Kings (Mr. Nowlan) and myself is not sound, then I feel that the minister should say why it is not sound. The other evening I tried to get him to do so, but he did not. I have read his speech again and I can find nothing in it to show why the arguments and the fears of the people of the maritimes and Newfoundland are not justified. Therefore it seems to me that at this stage there is every reason for the minister when he replies, if he has evidence that we are wrong, to show where we are wrong and allay the anxiety which I believe is justifiably felt in the maritimes and in Newfoundland.


Percy Ellis Wright: Mr. Speaker, I make no apology for taking part in the debate on this bill. I think it is probably one of the most important measures we will have before us at this session, especially as it affects western Canada, the maritimes and British Columbia. I should expect that every member from western Canada would want to take part in the debate and express his views and opinions as to what should happen with regard to the Canadian freight rate structure. We can never have distribution of industry in Canada until we have a freight rate structure different from what we have at the present time. It is one of the main reasons industry is concentrated in central Canada, and why it is so difficult to disperse industry throughout the country. Therefore I should think every member from western Canada would feel it his duty to take part in this debate.
The first thing mentioned in the bill is the board of transport commissioners. It deals with the salaries of the members and certain conditions under which they serve. I agree with many members who have preceded me

and with the report of the Turgeon commission, that the personnel of the board of transport commissioners should be strengthened. Too often in Canada appointments to such boards have been on the basis of service rendered to a political party rather than a particular knowledge of the subject the board has to deal with. I think it is time that practice was stopped, especially on a board of the importance of this one. There is only one other board I can think of that is as important; that is the tariff board. Both boards deal with very complicated subjects which it takes not one or two months but probably one or two years to master. The personnel of these boards should be men of standing in the community, men with some knowledge of the subjects with which they are dealing.
I agree with the hon. member for Assiniboia (Mr. Argue) with respect to the chief commissioner and the assistant chief commissioner. I do not see why of necessity they should be members of the legal profession. As a matter of fact I know of no other group in the country who have less to do with freight rates than the members of the legal profession, unless they happen to be connected with one of the railway companies as legal advisers. There are businessmen in this country who have through their own business a fair knowledge of the freight rate structure and of some of the difficulties of operating thereunder. I would think such businessmen or economists could quite well fill these important positions. As a matter of fact in the fourth section of the bill it states that an appeal now lies from the board to the Supreme Court of Canada upon a question of law or jurisdiction. Therefore if the chief commissioner made a mistake with respect to a question of law it would not be as serious today as it might have been before when there was no appeal on questions of law to the supreme court. Therefore the necessity that the chief commissioner be a legal man would seem to me to be removed by this section of the act. I would suggest that in Canada there are men other than those in the legal profession who could serve on this board and do a very good job so far as equalizing freight rates is concerned, and the various other duties which come under the jurisdiction of the board. We have had members of the legal profession on the board as chairmen, and according to this report of the Turgeon royal commission on transportation in the past 23 years the board has not performed its functions in a satisfactory manner. As a matter of fact in a great many respects
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this report is a condemnation of the board. On page 271 of the report the commission states:
That the board accepted the assumption that all rates could be justly and reasonably increased by the same large horizontal percentage increase . . . This is an unwarranted assumption;
That the board did not itself obtain, or compel the railways to file with it, proper statistics concerning traffic movements so as to enable it to determine which articles could bear greater or lesser increases in rates;
That the board has not paid sufficient attention to the classification to ascertain that articles are properly classified to meet changing conditions;
That the board has not over the years kept close enough supervision over competitive rates;
That the board has not in the past 23 years taken steps to bring about equalization between rates in the west and in the east.
That the board has not paid proper attention to the effect of increases in rates on long haul traffic.
These were not all faults of the board. In another place the report states that the government has failed to see that the board had the proper technical help to do the job that it should do, and that the board did not get the assistance it should have obtained from the railways in that the railways did not file sufficient information with the board to enable them to make decisions. I do not know whether the board had the authority to demand that the railways do so, but at least up to the time this report was tabled apparently the board did not have the proper statistics or information to enable it to do otherwise than make large horizontal increases in freight rates.
There are some good features in this bill. It does provide that the board shall have more authority than it had before to demand that the railways file certain information. Up to date, however, the board has failed to do the job it was appointed to do in maintaining reasonably equalized freight rates across the Dominion of Canada. I know that in Canada it is impossible to have a completely equalized freight rate structure. It is just nonsense to talk of it in those terms. We have geographical conditions in Canada which make it impossible. We have certain commodities which must be exported, and to be in competition with the exports of the countries where the commodity is produced close to the seaboard it is necessary for us to take that into consideration in setting the freight rates.
But having said that, there still remains in Canada a great field in which equalization could be carried out. Provision should be made for that. Some provision is made in the bill. In the last part of the bill there is an indication that a grant of $7 million will be made to bridge the gap between eastern and western Canada, and that this subsidy will be

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paid to the railways for the maintenance of the track in that area. But I want to point out that $7 million is just a drop in the bucket. Today we are paying far more than that on just one product, feed grain to eastern Canada. Since 1941 we have paid a total subsidy of approximately $160 million on that product. I ask the minister this. When the $7 million is paid is the government going to consider that they have bridged that gap, and so drop the subsidy on feed grain being shipped to eastern Canada? That would be the logical conclusion to draw, that having made a payment of $7 million they will drop the $16 million a year they are now paying as a subsidy on feed grains. There has been no indication from the government in any of this legislation as to their intentions in this regard.
In connection with this matter of feed grains I want to point out that the recommendation of the Canadian Federation of Agriculture is dealt with on page 161 of the commission report in these words:
The Canadian Federation of Agriculture recommended that the feed grain assistance policy be incorporated in the freight rates structure as a permanent feature of Canada's agricultural program, and stated it should be brought about by "parliamentary statute similar to the Maritime Freight Rates Act."
We have three bills before us, and I ask the minister what the intention of the government is with regard to this subsidy. At the present time these payments are made from year to year, and the agricultural industry has no assurance that they will continue to be paid. That is not a fair position in which to leave the agricultural industry of this country. If the government expects increased production, if they expect a stabilized agriculture, they have to do something about the subsidy being paid on feed grains. Before this subsidy was paid the situation in Canada was that feed grain going to eastern Canada to be fed by the producers of agricultural products in eastern Canada paid a higher freight rate than similar grain going to the producers of similar products in Holland, Belgium and the Scandinavian countries. The producers in those countries could buy feed grain for less than the producers in Ontario, Quebec or British Columbia. This is a matter that has apparently escaped the attention of the government. They are continuing to deal with it from year to year as pressure is brought to bear at the time the freight rate on feed grain is reconsidered. I would ask the minister to state the policy of the government with respect to this matter when he speaks at the conclusion of this debate.

Another matter which I believe should be dealt with in the equalization of freight rates concerns freight rates over the Hudson Bay railway. I have figures which indicate that a shipment of pulp, for instance, to the port of Churchill from Erwood in northeastern Saskatchewan via the Hudson Bay railway pays double the freight rate for the same product shipped the same number of miles to the United States market. This does not make sense. It simply means that the port of Churchill cannot be used for the export of these products because the freight rate is such that they cannot compete in the European market. If we had some equalization of these freight rates it would mean that we could use that port to export some of these products which can be produced in northeastern Saskatchewan and northwestern Manitoba.
Another matter with which I should like to deal is the classification of freight. This is a tremendously involved matter, and I am not going to try to argue the technical points. It is so involved that even the shippers are unable to find out exactly what classifications their products take. Not only that, but the railway agents themselves in many cases are unable to give proper classifications to shippers. I know of a man in western Canada who makes his living by going to merchants and asking them for their freight bills for the last month. He looks over those freight bills and then says to the merchant: "I believe I could save you a lot of money on these freight bills". The merchant inquires as to what it will cost. The man replies: "Just half of what I save you." By getting the proper classifications and making applications for refunds, he is making a good living and the merchant is getting half the take-home pay of this particular man.
As a result of classifications that are so involved that the shipper himself cannot determine what the proper classification is, and the agents of the railway companies themselves apparently do not know what the proper classification is-and being in doubt of course they naturally classify the particular article in the highest category-the shippers in this country find that freight charges are costing them much. This act claims to simplify these classifications. I know it is not an easy matter to accomplish this result. Under the old act the classifications were: (a) the standard freight tariff; (b) special freight tariffs; and (c) competitive tariffs. There were, of course, a great many other classifications under those three headings. But under the new act there Eire four classifications: (a) class rate tariffs; (b) commodity rate tariffs; (c) competitive rate tariffs; and (d)

special arrangements tariffs. Special arrangements tariffs are defined in section 7 of the bill which sets out the new section 328, subsection 5 of which reads as follows:
Special arrangements are charges, allowances, absorptions, rules and regulations respecting demurrage, protection, storage, switching, elevation, cartage, loading, unloading, weighing, diversion and all other accessorial or special arrangements that in any way increase or decrease the charges to be paid on any shipment or that increase or decrease the value of the service provided by the company.
I do not know just what they can put under that definition, but it seems to me they can put nearly everything under it. Just how the ordinary shipper in this country is to be able to tell what classification his particular freight comes under will still be a mystery to him, to the agents of the company and to everyone who has not made a special study of the act. I would therefore suggest to the minister that as to these classifications some simplification be brought about so that shippers may at least have some knowledge of the proper classification under which their freight comes. Otherwise you will find that, as at present, some people will make a living simply by going around and correcting the mistakes made by either the shippers or the agents of the companies themselves.
These are matters which I think the minister and the committee should take into consideration in redrafting this act. Freight rates are important to our economy in Canada; in fact I know of nothing that is more important to our economy. Unless we get under this act some clarification with regard to the equalization of our freight rates and the classification of our freight, there will not be much advantage in drafting a new act.
There are many other matters which might be mentioned in dealing with this act, but I do not propose to deal with them tonight. When this bill goes to the committee I believe witnesses will be called before it, and the committee will have more evidence than we have here on which to base its judgment and recommendations with regard to improvements in the act. When the bill comes back to the house I hope it will be more specific than it is at the present time with respect to some of its clauses.


Mr. W. G. Dinsdale (Brandon):: Mr. Speaker, it has not been my privilege to listen to the background of debate of this question of freight rates other than that to which we have been listening today. I think, however, that sufficient has been said to give me one or two points that I may use in my remarks tonight. Of course I have also made it my business to read carefully the bill and the report of the Turgeon commission, as well as
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the brief submitted by the Manitoba government. Tonight I want to deal with some of the main problems that the bill we are considering at the moment raises with respect to Manitoba and the prairie provinces generally.
It seems to me the question of utmost importance that emerges out of the discussion is the possibility of increasing freight rates. It would seem that is even more important than this matter of equalization which has been discussed by so many hon. members today. The whole problem was brought to the attention of the government in the first instance, I believe, by the submission of the prairie provinces with regard to the problem of rapidly increasing freight rates; and in the early stages the matter was discussed before the board of transport commissioners and the federal cabinet; then more recently, of course, it was discussed by the royal commission on transportation.
I think I am correct when I say that Manitoba was the first province to appear with its brief before the royal commission on transportation. I agree with the other hon. members who have taken part in the debate today that the railroads are extremely important to the whole of the Dominion of Canada; and obviously they are extremely important to the economic well-being of western Canada. We have had references to the history of the development of our railroad system, and at this time there is no necessity for me to repeat those facts. I should like, however, to give some suggestions that will indicate why Manitoba has a special interest in the bill that is under discussion here this evening.
In 1951 the two railroads will collect from the people of Canada more than $1 billion. While the average Canadian pays $5 out of $100 of income received, the statistics I have obtained indicate that the Manitoba resident will pay close to $1 out of every $15 of income received or almost $7 out of every $100 of income. Mr. Moffat, the economic adviser to the Manitoba government in regard to this matter, recently made this statement:
I doubt whether there is any other place in the world which pays such a high proportion of its income for transportation services as do the people of the prairie provinces.
There is another way of expressing the thought I am endeavouring to convey to the members of the house. The payments that will be made to railroads in the present year are about equal to the normal average farm value of all the wheat, oats and barley produced in Canada.
Looking at the bill specifically-and I have endeavoured to read it as carefully as possible

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*-I say it seems to be a mixture of sections which merely clarify and spell out more carefully certain procedures. Second, there are other sections which make rather important changes in the rate structure of the Canadian railways. This of course has been pointed out very effectively by the speakers representing the maritime point of view. Let me quote from the famous section 332A, if I may be permitted to repeat. It reads:
It is hereby declared to be the national freight rates policy that, subject to the exceptions specified in subsection four, every railway company shall, so far as is reasonably possible . . . charge tolls to all persons at the same rate, whether by weight, mileage or otherwise.
The bill then goes on to say that with a view to implementing that policy the board of transport commissioners may require any railway company:
To establish a uniform scale of mileage class rates applicable on its system in Canada.
Second:
To establish for each article or group of articles for which mileage commodity rates are specified, a uniform scale of mileage commodity rates applicable on its system in Canada.
That deals with this matter of equalization which has been discussed so frequently today. If I may express it in another way, for the first time this parliament is proposing to pass a law requiring the board of transport commissioners and the railways to provide throughout Canada a uniform scale of railway freight rates. That is the matter on the surface. There is a joker, as we soon discover as we read the bill. This joker is in the form of the many exceptions to the equalization aspect. I am going to mention some of these exceptions at the risk of repetition; but in order to make my point this evening it will be necessary to do so. The first exception is that there can of course be differences in the rates if the description of the commodities is different. In other words, the rate for wheat can be different from the rate for automobiles. The second exception is the rate can be different if a different kind of equipment is used. The rate for tank cars and the rate for gravel cars can be different. Then there is a third exception, which is that joint international rates between Canada and the United States can continue to be dealt with on an international basis and need not be equalized. Then, fourth, rates introduced to meet competition do not need to be equalized. An elaborate new section is included with respect to the information to be provided to the board when any competitive rate is introduced. The thought in mind in regard to this clause apparently is that the board should take a more aggressive stand in regard to competitive rates to see that the railways do not continue

the practice which has developed in the past, under which competitive rates in some areas were reduced to such an extent that the revenue loss had to be made up by extra high charges on long hauls of non-competitive traffic in other areas.
That is very important so far as the prairie point of view is concerned. There is a fifth exception which says that in addition to those specified exceptions the equalization section will not override the subsidy arrangement included in the Maritime Freight Rates Act and the special provision with respect to the Crowsnest pass rates in western Canada. And finally there is a provision that an exception to the principle of equalization can be made in any other case where the board considers that an exception should be made. From this long list of exceptions, and from the importance of the items covered in the exceptions, it seems clear to me that the new legislation with respect to equalization of freight rates in different parts of Canada is applicable only to a relatively small part of the total rail traffic.
We might look at it in this way. It provides that the rates shall be equal for the same distance in eastern Canada, western Canada or central Canada for all traffic which moves under similar conditions in all parts of Canada. But where conditions are different the rates also may be different. Obviously the situation with respect to the shipment of grain in very large volume from the small towns of western Canada to Fort William is quite different from the situation with respect to the shipment of grain from one point in eastern Canada to another point in eastern Canada. Consequently no one, so far as I can see in the report, has seriously proposed that the grain rates in western Canada and eastern Canada should be equalized. We might use another illustration. There are great differences in the shipping conditions applicable to the coal mines in Alberta and the small towns in the prairies as compared with the shipment of coal from import points in eastern Canada to the big cities of eastern Canada. And again no one has seriously suggested that the coal rates in the two areas should be equalized. It appears that what it will mean is that a person shipping hardware or groceries 100 miles from Brandon, Souris or any other Manitoba town will pay the same rate he would pay if he shipped the same commodity the same distance from a town in Ontario, Alberta or British Columbia. As far as I can see this is as far as the equalization aspect goes.
Turning from the problem of equalization -and that has been the issue most frequently discussed-as I indicated in my opening

remarks I feel that underlying the discussion today is the problem of the constant demand for increased freight rates. I want to spend a few moments dealing with that situation. This matter of equalization should never obscure the fact that an increase of 5 per cent in the general level of rates will cost the people of Manitoba about $8 million. The regional questions and the questions of equalizing rate levels, important as they are, particularly in the manner in which they call upon one region to meet deficits arising elsewhere, are very unlikely to amount in dollars and cents to a figure that is at all comparable to the cost of a general rate increase of 4 per cent or 5 per cent, and that is the crux of the matter. It was that situation, as I indicated, which brought the whole problem of freight rates out into discussion, and I think it still lurks very strongly in the background and will inevitably have to be dealt with by the board of transport commissioners, as well as possibly by hon. members.
If I might review just briefly the story of freight rate increases since 1946 as I have discovered it in the reports, it was in October of 1946 that we had the first general increase in Canadian freight rates since 1920. During the twenties, the thirties and for that matter all during the second world war, the railways operated on the same basic rate structure and were able to maintain their systems in such condition that they found it possible to meet the tremendous increase in wartime traffic without any serious disruption in the ordinary services provided.
At first glance it might seem strange that railways could carry on with no change in rates between 1920 and 1946, a period of some twenty-six years, and that in the next three years they should apply six times for rate increases and feel justified in asking for a further 20 per cent in June, I believe, of 1951. On the other hand of course it may seem strange that in a period when prices of commodities in Canada have risen rapidly, and when everyone is aware that living and operating costs are increasing, there should be strong opposition to increases in railway freight rates. Underlying the dilemma is the problem of inflation which has also been discussed in this chamber from time to time during this session.
There are two viewpoints in the matter. First there is the viewpoint of the railroads, and then there is the viewpoint of the various groups we have heard expressed today. I should like to refer particularly to the Manitoba viewpoint in regard to freight rate increases. The railway problem, in one sentence, is that of increased operating costs
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which mean increased wages paid to employees and increased costs of materials used by them. I have some statistics which have been compiled and which present the situation from the railway standpoint. In the present year the two railway systems will pay very close to $500 million in wages to their employees. This alone uses approximately one-half of their total revenue. The railways estimate that if the 1939 wage rates were still in effect they would have to pay only about $270 million in wages. In other words the increase in wages alone, according to the railways, has cost them about $230 million more than the pre-war period.
Then there are the costs of fuel, ties, rails and other materials used in railway operations, which have increased at an even more rapid rate, but which actually form a smaller part of the total railway costs. The Canadian National Railways have estimated their increase in these items at about $75 million; and while there are not any figures for the Canadian Pacific, they would correspond to those of the national system.
When the railways present their case, as they will be doing of course after the house has considered the legislation, these will be the arguments used. The provinces, on the other hand, point to the very large increases in revenue which have occurred, without regard to the rate increases. In 1939, according to my statistics, the Canadian railways hauled 85 million tons of freight, while in 1951 they will haul over 155 million tons of freight, an increase of over 80 per cent. Even at the old rate, the extra revenue from that amount of extra traffic would go far toward meeting the additional costs about which the railways talk. In addition there have been very large rate increases. Some of them were put into effect by the railways themselves, without need of approval by the board of transport commissioners. Some of them were based upon the international rate, where the practice has always been to allow Canadian roads to put in the same increases that are allowed by the interstate commerce commission of the United States, and some are increases granted from time to time by the board of transport commissioners.
On the average I am told these increases amount to about 40 per cent above the rates which were in effect up to April, 1948, and they represent revenue to the extent of $220 million in 1951 even at the present rate levels, without any increase on the basis of the new application. The result is that when everything has been said on both sides, inevitably we will have to face an issue-I suppose the board of transport commissioners

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will have to face it-to decide whether the increase in the operating costs of railways, as the result of wage and material cost increases, has or has not been covered adequately by the rate increase and the revenue from the increased volume of traffic hauled by the railways.
There seems to be some fear among hon. members that perhaps decisions will be made in favour of increases in railway rates. Of course the job primarily will be to balance the estimate of extra wage costs arising out of the forty-hour week and the extra costs of materials at current prices against the extra revenue which will come from the higher traffic volume this year, and to decide what increase, if any, is necessary to cover these costs and still leave available sufficient cash for the general purposes of the railways in the payment of interest, taxes, depreciation, dividends and enough surplus to carry through in any difficult period, or to improve the standard of the service. And that, of course, is a real problem.
I must not dwell longer upon that theme. I have not been too specific, so far as it affects the prairie provinces. My interpretation of the brief submitted by the Manitoba government is that they were very disturbed over the possibility of freight rates increasing above the present level. The whole matter was initiated by those provinces-the maritime provinces as well as the western provinces

which have found themselves in an unfavourable position so far as freight rate structure is concerned.
I wish to conclude by making brief reference to the Crowsnest pass rates. It may be that we are beating old straw, but I have been doing some research to satisfy myself and I find that these rates have been in effect at their present level for many years. I believe they were introduced in 1899 as the result of an agreement under which the Canadian Pacific was given a subsidy by the federal government for the construction of a railway line through the Crowsnest pass in southern British Columbia.
After being in effect for about four years they were reduced by the company, on its own initiative, to a level well below the agreement level, and were kept at the lower figure until 1918. Then from 1918 until 1922 the rates were suspended by action of the federal government, and they were restored in 1922. I understand these rates are fixed specifically by act of the Canadian parliament, and therefore cannot be changed except by another act of the federal parliament. It seems that because of this they were not an issue in the presentations before the board of transport commissioners. However, according to the report the C.P.R. did submit

figures to the Turgeon commission attempting to prove substantial losses at the present rates on grain, and asking the commission to make a complete inquiry into the whole subject. The governments of the three prairie provinces, the wheat pools, the united grain growers, the Canadian Federation of Agriculture as well as the provincial federations of agriculture in the western provinces took the position that this was much too large an issue to be dealt with by any body other than the highest policy-making body in the country, the federal parliament. If there is any change made in the Crowsnest pass rates it wffi come only after much discussion in this house. The future is unknown and no one can predict what may happen, but I feel that there are implications inherent in the bill now before us. I should like to read what the Turgeon commission had to say with reference to the Crowsnest pass rates problem:
The commission does not believe that the time has come to deal with this great export industry without regard to considerations which the board cannot apply. If it is suggested that in this case parliament might give special directions to the board, the answer is that the result of such procedure would likely prove unsatisfactory. So long as planning of any sort is called for in regard to these rates it had better continue to be done by parliament itself ...
In expressing the opinion that these Crowsnest pass rates should remain in their present position what is meant is only that they should remain under the immediate control of parliament. It cannot be said, and nobody has asked that it should be said, that their present level must never be changed. None of those who oppose repeal have asked for any more than that parliament's control should continue and that parliament itself should make whatever changes in these rates, upward or downward, it may appear just and reasonable to make as time goes on.
From the point of view of western agriculture that conclusion by the Turgeon commission is in one sense quite encouraging, but in another sense it seems to point a warning finger at the future. The recommendation is that those rates should continue under the control of parliament, but it leaves absolutely open the possibility of future review. No doubt as we move into a discussion of other aspects of the report beyond the scope of the present bill this matter will come up for consideration. I merely wanted to introduce it tonight so that Manitoba's position might be on the record.


Mr. R. R. Knight (Saskatoon):: Mr. Speaker, I sometimes think the ministers on the other side must think that when we of the opposition are confronted with a Swiss cheese we see nothing but the holes therein, but the fact is that at times some of the legislation presented by this government does contain holes.


Stanley Howard Knowles: Too many maggots too.


Robert Ross (Roy) Knight: I did not say that. However, I do want to refer to a couple of holes which I detect in this particular delicacy. It would not be expected that any member representing the federal constituency of Saskatoon would keep completely silent when the matter of freight rates or their equalization was being discussed in this house. That may be due to the fact that we are centrally located between two oceans a great number of miles apart and are therefore greatly dependent upon a reasonable freight rate. As the minister knows, our prosperity or lack of prosperity depends upon that.
Our geographical position is such that almost all the things we need must be brought in by freight. We bring our lumber, our apples and other fruits across the mountains from British Columbia; then across that unproductive bridge that has been referred to tonight we bring many of the manufactures of the east, farm machinery, canned goods, building material and so on. Saskatoon is a great wholesale and distributing point. There are many warehouses there to which goods are shipped and then from them reshipped to the smaller towns throughout the province. Those are the imports, but we also ship out all those products which are indigenous to the rich lands which surround our city.
Another matter which concerns us is the success of the Hudson Bay railway. The minister does not need to be told of the extent to which I have interested myself in that project. There again we have the inequality of freight rates working to the disadvantage of traffic moving over that route. That has a considerable bearing upon the future of our city.
I admit that most of the arguments have been covered by the western members from this C.C.F. group, and I hope some of my western Liberal friends will have a word or two to say upon these matters before this debate closes. One subject which I think has taken up too much time in this debate has been whether or not lawyers are the best men to be appointed as transport commissioners. I am inclined to agree with the hon. member for Assiniboia (Mr. Argue) that it does not matter what profession a man has, provided he is the best man for the job. He mentioned as a potential member of such a board a professor of economics. It is a matter of pride to me that we have in our city a man who has some reputation in connection with boards of this description. I am thinking of Dr. George Britnell, a professor of economics residing in my city. Some time ago he was briefed by Guatemala to make an economic survey of that country. I think he did that with great success. He
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presented a report which brought him considerable personal praise and which was of great assistance to the country which had employed him. Dr. Britnell also helped in the preparation of a brief which was presented to the royal commission on transportation. He is not a lawyer. Two other Saskatoon men also were of assistance in that matter, Dr. Fowke and Dean Cronkite. The latter gentleman is a lawyer, but I am sure he is none the worse on that account.
I should like to come back to the holes in the cheese to which I referred. Needless to say I welcome the principle contained in this bill and am prepared to support it because it contains the principle of equalization of freight rates. However, there are some other things in the bill from which I gain no comfort. The bill contains no assurance in connection with one thing with which we are concerned. Provision is made for the handing over of $7 million per annum to the railroad companies.
It is said to be the implementation of the recommendation of the royal commission on transportation that this money should be handed over to cover the maintenance of that barren portion of the railroads between the prairies and the industrial east. However, it was my understanding that the money was to be used for a reduction of freight charges across that unproductive bridge or other stretches of rail and therefore would have been an implementation of the principle of the bill, namely some degree of equalization. But I do not find that laid down in the bill. I find the principle laid down but little else in that particular clause. I do not find any provision stating that the railroads will have to give any return for that money, no quid pro quo, no guarantee that there will be in fact any equalization or reduction in freight rates in consequence of such payment.
I cannot see the value of the bill if it leaves so much to the discretion of the board of transport commissioners. There is another vital section of the act, and I say "vital" because it is the crux of the whole matter which is unsatisfactory to me. This is what I might call the equalization section. It sets out in two or three clauses labelled a, b, and c, the manner by which the board shall compel the railways to establish in some degree a uniform scale of freight rates such as is desired. That is fine as far as it goes. It permits the board to interfere with any freight rate scale which, in the opinion of the board, is unjust and unfair. But having done that it then proceeds, to my mind, to negative the whole matter so that these subsections do not apply. In the bill it is implied

Railway Act
that the board cannot be expected to tamper with international rates or with import and export rates. With that I suppose I can have no quarrel because another nation is concerned; but clause (c) gives me some concern. It simply consists of two words, "competitive rates". I do not know exactly what that term means, but I take it that we now have such rates; and if the term refers, as I think it does, to competitive water or motor transport rates then I ask hon. members if that loophole does not nullify the whole thing. Is it not in this particular section that the government should, by some method or other, prove its sincerity in its desire for equalization?
Then there is another clause which in my opinion leaves too much to the discretion of the board, in that it states that the board has jurisdiction over any other case in which the board considers that an exception should be made from the operation of this section. To my mind this clause nullifies the whole purpose of the bill because it simply leaves the board the discretion to allow any freight rates considered unfair by the people of Canada to remain unaltered.
Time is short, and I am quite sure the minister, who has been the victim, one might say, of all the inquiries, questions and doubts expressed, among which are mine, will want to speak at some length upon these matters. I think he cannot be expected to do so in the period of a minute and a half that is left. Therefore I think we should postpone his reply until another day when the minister can, in his own clear and concise way, answer our questions, put an end to our doubts, and give us in this case the complete cheese without any holes in it. I ask him when he replies to these questions to pay attention to the points I have put before him and try to satisfy me on these two particular matters.
On motion of Mr. Knight the debate was adjourned.



BUSINESS OF THE HOUSE

Lionel Chevrier: On Monday we will revert to the debate on the address in reply to the speech from the throne.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to the order of the house passed on October 12, 1951.
[Stage Direction]
Monday, October 29, 1951